Australian investors dumping property in favour of stocks

Photo by Adam Nowakowski on Unsplash

New research shows Australians would prefer to invest in the sharemarket than property at the moment.

The second iteration of Switzer Financial Group's "Switzer Fear, Greed & Hope survey" shows over half of Australians (62.8%) surveyed would prefer to invest in stocks over property, term deposits and other investments. 

The same number (62.8%) of stock investors believe now is a good time to invest in the sharemarket. 

Switzer Financial Group Director Peter Switzer said the results fly in the face of Australia's obsession with property.

"Even though Aussies are often portrayed as addicted to property, the coronavirus crash has seen 63% of those investors surveyed prefer stocks, while only 10% think bricks and mortar looks attractive," Mr Switzer said.

"And those so worried that they only want to invest in government-guaranteed bank term deposits numbered 10%, which suggests 90% aren’t spooked by the coronavirus economic threats."

The survey found that 54% of the 3,000 respondents think property prices will fall in the coming 12 months, compared to 66% who think share prices are on the way up.

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Advertisement

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

Product Features

• Fast turnaround times, can meet 30-day settlement
• For purchase and refinance, min 20% deposit
• No ongoing or monthly fees, add offset for 0.10%

Monthly repayments:$1,819

3.60%Advertised Rate (p.a.)

3.96%Comparison Rate*

More details

According to the survey, 37.4% of investors believed the stock market would crash in 2021 when surveyed in February.

Now, 40.7% believe the stock market will crash in 2025 or later. 

When asked what stocks they would invest in, Australians said they think CSL and Macquarie Group are the stocks that will perform best over the next 12 months. 

“This shouldn’t really be surprising as both these companies are world class and serious export-income earners," Mr Switzer said. 

"But it indicates that so-called ‘mums and dads’ (or retail) investors are becoming more sophisticated analysts of the share market.

"I suspect the combination of online trading and the escalation of financial education, especially around stock market trading, have created a smarter group of retail investors who might have ‘eaten the lunch’ of the smarties who run funds."

The survey found that 39.8% of respondents said they haven't changed their investing strategy due to COVID-19, while 38.7% have become more conservative and 21.5% have become more aggressive as a result. 

Bank stocks have surged this week, with shares in NAB up +4.7%, followed by ANZ (+4.5%), Westpac (+4.4%) and Commonwealth Bank (+2.2%). 

Similar gains were seen in smaller banks, with shares in Bendigo and Adelaide Bank up +4.1%, Bank of Queensland (+2%), Macquarie (+1.6%) and AMP (+2.7%).

“This great move up for stocks out of the bear market is a welcome trend that tells us that there’s an expectation that our economic future is looking miles better today than it did one, two and six weeks ago,” Mr Switzer said. 

The survey featured more than 3,000 respondents made up of middle and mature aged investors who are either full-time workers or retirees.

It should be noted that the majority of this database prefer to invest in stocks.

---

---

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

Latest Articles

• RBA remains hawkish on inflation despite real wages not rising until 2024 August 05, 2022
• ING increases popular savings account rate to 3.10% p.a. August 04, 2022
• Where to next for Australia’s property market? August 04, 2022
• Jacaranda Finance launches 60-minute car loan August 04, 2022
• Employees, self-funded retirees feel the brunt of cost of living increases August 03, 2022