Property investors are showing more confidence in the market this year than in 2017, according to the latest Property Investment Professionals of Australia (PIPA) Property Investor Sentiment Survey. So far, at least, it appears investors are unfazed by finance issues, taxation policy changes, and the market slowdown in Sydney and Melbourne.
Over 77% of the 820 respondents believed that now is a good time to invest in property, with 52% planning to buy a property in the next six to 12 months.
The number of investors saying that changes to investor lending policies have affected their ability to secure finance for an investment property increased to 48% from 43% in 2017.
Possible changes to negative gearing and Capital Gains Tax policies are also a growing concern, with 45% of respondents indicating they would reconsider their future investment plans as a result of proposed changes.
“The financial services crackdown on investors is having an impact on sentiment,” PIPA Chairman Peter Koulizos said.
“Turmoil in government ranks that saw a change in the prime ministership has translated into increased opinion poll support for the opposition, so investors face the very real prospect of seeing tax deductions cut, and this is playing into their purchasing decisions.”
Nearly 60% of investors expressed that their portfolio will be positively geared within five years, while 71% believe that altering negative gearing and Capital Gains Tax policy will not improve housing affordability.
There were unfavourable reactions on increasing rates, but many investors remained unphased.
“While a majority of investors (64%) believe it’s unfair to charge investors higher interest rates compared to owner occupiers, most (61%) also indicate they will have no problem meeting higher interest rates when their loans switch to principal and interest repayments,” the PIPA report said.
More importantly, reports about the weakening market, especially in the major cities, were from putting a stop to discouraging investors to In fact, almost 90% indicated that concerns about price drops in Australia’s two biggest capital cities will not slow down their investment plans.
“Brisbane remains the hot favourite for investment, according to the survey, with 44% believing it was the capital city with the best investment prospects (up from 43% last year).”
“About 26% picked Melbourne, down from 32% last year, while only 8% chose Sydney as having investment potential,” PIPA stated.
Kay Rivera, Your Investment Property, 25 September 2018