Investors reveal biggest concerns

Originally published on Smart Property Investment

There are two primary factors impacting people looking to invest in Australia’s property market, fresh insight has revealed.

According to the 2019 PIPA Property Investor Sentiment Survey, the two biggest concerns for investors revolve around gaining access to lending, as well as Australia’s current economic conditions.

“Given tight lending conditions and the financial sector’s response to the banking royal commission, a staggering 25 per cent of respondents have found they were unable to refinance an amount they were able to borrow previously,” PIPA chairman Peter Koulizos said.

“This situation is potentially one of the reasons why the number of investors in the market has fallen dramatically – with 34 per cent of investors purchasing a property over the past 12 months, down from 43 per cent in the 2018 survey.”

That being said, the research also found that the majority of investors are focusing on the long-term merits of real estate, with 78 per cent saying concerns about potential falling house prices “wouldn’t cause them to put investment plans on hold”.

A further 82 per cent believe that now is a good time to invest in residential property. By comparison, 77 per cent stated this at the same time last year.

“Long-term capital growth beat out cash flow – both long- and short-term – as the most important aspect when choosing an investment,” Mr Koulizos said.

“Property investors are just trying to looking their lot because when asked why they choose to invest, the most important reason was to provide a better life financially for themselves and their family, while the idea of ‘becoming rich’ was one of the least important reasons.”