Investors favour regional locations

Property investors have remained positive throughout COVID-19, however the pandemic has made them reconsider where they will buy and also live, according to the Property Investment Professionals of Australia (PIPA) Annual Investor Sentiment Survey 2020.

Insights from about 1100 property investors during August were collated, and the findings showed that potential falling house prices would not cause 77 per cent of the investors surveyed to put their plans on hold.

PIPA Chairman Peter Koulizos said property investors had remained resilient in the face of the unprecedented uncertainty we were all currently experiencing.

“About 67 per cent of investors believe that now is a good time to invest in residential property, according to the survey, which is down from 82 per cent in 2019 and no doubt a direct impact of the pandemic,” he said.

“However, at the current time, the property market has continued to show its resilience, with prices materially stable in most parts of the nation.”

According to the findings, about 44 per cent of investors are looking to purchase a property in the next six to 12 months.

“About 71 per cent of investors have indicated that the pandemic has made it less likely they will sell a property over the next year, which is another factor that will help to underpin property prices,” Mr Koulizos said.

The pandemic has also influenced more than 17 per cent of the investors surveyed to consider moving to another location, with regional areas set to benefit the most.

The appeal of metropolitan markets is down from 73 per cent in 2019 to 61 per cent in 2020, while regional markets have increased from 15 per cent in 2019 up to 22 per cent this year, and coastal locations are up to nearly 12 per cent from eight per cent last year.

“The survey found, for those investors considering relocating, the main reasons for doing so were improved lifestyle factors (78 per cent), working from home in the future (46 per cent) and housing affordability (40 per cent),” Mr Koulizos said.

“And it seems that regional locations are set to benefit from plenty of new residents with investors indicating their top locations to migrate to are regional New South Wales (21 per cent), regional Queensland (18 per cent) and regional Victoria (14 per cent).”

PIPA Member and BFP Property Buyers Founder and Principal Ben Plohl said they had been active in parts of regional NSW and regional Victoria over recent months because of the favourable market conditions in these locations.

“The survey results show that many of these areas will be welcoming plenty of new residents in the months ahead, which will likely further strengthen property markets in some regional locations,” he said.

Furthermore, more than 40 per cent of investors intend to buy a property in a state or territory that is different to the one they currently live in.

Although it has fallen to 36 per cent, down from 44 per cent in 2019, Brisbane is seen as the state capital with the best investment prospects over the next year.

Melbourne clocks in at 27 per cent, the same as last year, with Sydney rising from 14 per cent last year to 18 per cent, and Adelaide rising one per cent to eight per cent.

Perth saw an increase to six per cent from four per cent last year, Canberra at two per cent from one per cent last year, Hobart at two per cent and Darwin at 0.2 per cent.

More broadly, Queensland is the top state overall at 36 per cent, followed by Victoria at 27 per cent and NSW at 21 per cent.