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A majority of investors still believe it’s a good time to invest in residential property, a survey has found.

The Property Investment Professionals of Australia (PIPA) Property Investor Sentiment Survey found that 58% of investors say they are looking to buy within the next six to 12 months, while 71% said now was a good time to invest in property. This is in spite of 32% of respondents saying changes to lenders’ investment policies have impacted their ability to secure finance.

Investors also seem unconcerned about the future of negative gearing. The survey found 72% of respondents were not worried about the potential removal of the concession, and only 2% said the current negative gearing arrangements were the key attraction of real estate investment.

Nearly half of the survey’s respondents (47%) said they were positively geared, and 63% of negatively geared investors said they expected to become positively geared within five years.

PIPA chair Ben Kingsley said the results showed most property investors saw the long-term benefits of residential property.

“Similar to last year, most property investors are looking past short term challenges, remaining focused on the long-term wealth benefits that are available from residential real estate, including the potential for capital growth and rental income. Importantly, most investors are not speculating on quick gains in a low interest rate environment,” Kingsley said.

Kingsley said the survey also demonstrated that discussion around negative gearing “misses the mark”.

“Most investors understand that negative gearing is only a short term cash flow position, not a property investment strategy. And only a very small minority are attracted to real estate for these tax concessions,” he said.


14 September 2016