According to a study by MCG Quantity Surveyors, the typical strategy of investing in markets close to home appears to be changing, with investors now exploring distant markets.
MCG Quantity Surveyors analyzed the details of its clients who ordered amortization reports during the year up to May and saw the growing number of investors investing in markets located nearly 300 kilometers from their main place of residence.
Mike Mortlock, director of MCG Quantity Surveyors, said this might reflect the fact that many real estate investors put aside familiarity and now study a market's potential before investing.
"There was a tradition among Australian investors to invest where they know and generally know where we live. The idea of ??wandering too far from your" locality of comfort "has scared investors in the past, so an average distance of 293 kilometers is considerable," he said.
Analysis showed that only 6.9% of investors have investment property in the same suburb, while 7.7% have invested in markets located around 1,000 kilometers from their homes. About 30% of investors have purchased property in markets more than 200 kilometers from their homes.
A large part of investors, at 60.1%, invested in markets within 50 kilometers of their homes. Mortlock said that while a significant portion of investors still prefer to invest in their locality, the number of those looking remotely is likely to continue to increase.
Read also: Regional prices are still on the rise
"Easily accessible online information, coupled with easy access to independent professionals such as buyers' agents, made it possible to shop with confidence in national hotspots, regardless of your location. In fact, investors have never been better informed about the best places to invest, ”he said.
Mortlock said investors are now looking to regional communities and small towns amid the COVID-19 outbreak. According to Mortlock, the effects of the epidemic on working conditions could make these markets more attractive.
“The ability to work from home will only increase their appeal, especially in lifestyle centers. For investors who are simply interested in looking for places where there is good rental demand and potential to rent. capital gains, following the population makes sense, ”he says.
A separate analysis from CoreLogic has shown that while the standardization of remote working amid COVID-19 is likely to stimulate regional migration, a return to an office environment may still be desirable for some employees and employers.
"Additionally, it is important to note that the general impact on housing demand from the pandemic could lead to lower prices in regional centers during the second half of 2020," said Eliza Owen, Head of Residential Research at CoreLogic.
If housing prices in regional markets are on the verge of falling, the drop would not be as sharp as what will be observed in the capital cities.
"Regional growth rates peaked towards the end of 2019 and could turn into negative territory later this year without a significant improvement in economic conditions or any obvious change in demand-side factors like population growth," he said. Owen said.
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