Almost 70% of investors still keen to buy, Queensland the place to do it

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on September 16, 2020
Almost 70% of investors still keen to buy, Queensland the place to do it

Photo by David Goulding on Unsplash

A new survey has revealed 67% of investors still believe now is a good time to buy residential property.

However, this was down from 82% in 2019, according to the Property Investment Professionals of Australia (PIPA) Annual Investor Sentiment Survey 2020. 

Queensland was offering the best investments prospects over the next year according to 36% of investors, followed by Victoria (27%) and New South Wales (21%). 

More investors are keen to look for regional opportunities, with 22% considering this, up from 15% last year, with coastal locations also on the rise, up to 12% from 8% last year.

Buying an investment property or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for investors.

Lender

Variable
More details
GREAT INTEREST RATE
  • Option to add an offset for 0.10%
  • No monthly or ongoing fees
  • Unlimited redraws
GREAT INTEREST RATE

Smart Booster Investor Bundle (Principal and Interest)

  • Option to add an offset for 0.10%
  • No monthly or ongoing fees
  • Unlimited redraws
Variable
More details
GET APPROVED FASTER WITH A DIGITAL APPLICATION
  • Split Loan Option
  • Unlimited additional repayments
  • Free redraw facility
GET APPROVED FASTER WITH A DIGITAL APPLICATION

Neat Variable Investment Loan (Principal and Interest) (LVR < 60%)

  • Split Loan Option
  • Unlimited additional repayments
  • Free redraw facility
Variable
More details
BUNDLE YOUR HOME LOAN AND YOUR INVESTMENT LOAN FOR MORE SAVINGS
  • Split Loan Option
  • Unlimited additional repayments
  • Free redraw facility
BUNDLE YOUR HOME LOAN AND YOUR INVESTMENT LOAN FOR MORE SAVINGS

Yard Investor Bundle Loan (Bundled with Home Loan)

  • Split Loan Option
  • Unlimited additional repayments
  • Free redraw facility
Variable
More details
100% FULL OFFSET ACCOUNT
  • Free redraw facility
  • Split account option
  • Unlimited extra repayments
100% FULL OFFSET ACCOUNT

Ocean Investment (Amounts < $1m, LVR < 60%)

  • Free redraw facility
  • Split account option
  • Unlimited extra repayments

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of June 29, 2022. View disclaimer.

Investors seem largely unperturbed by reports house prices could drop by 30% as a result of the pandemic, as 77% said potential falls wouldn't see them pause investment plans. 

PIPA Chair Peter Koulizos said COVID had drastically changed the investment landscape, but investor sentiment had held largely firm. 

"While there is no doubt that 2020 has been one of the toughest in living memory for everyone around the globe, property investors have remained stoic in the face of the unprecedented uncertainty that we are all experiencing," Mr Koulizos 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.

"That said, there is likely to be big changes to not only where people choose to invest, but also to where they may prefer to live in the years ahead." 

pipa2020surv1

Source: PIPA

The survey found 44% of investors were looking to purchase a property in the next six to 12 months, down from 48% in 2019.

Of those looking to invest in the next six to 12 months, 74% were interested in purchasing an established house, with the remaining distribution including townhouse/villa at 5.7%, unit/apartment at 2.0% and house-and-land package at 3.9%.

About 29% of investors purchased a property over the past 12 months, down from 34% in the 2019 survey

However, there was an increase of new investors, as of all respondents who purchased in the past 12 months, 29% purchased their first investment property in the year, up from 21% last year. 

Long-term capital growth was far and away the number one reason for investing (62%), followed by long-term rental income (26%). 

Mr Koulizos said only around 8% of investors required a mortgage deferral through COVID, with three-quarters of this number not needing to extend the original term.

A massive 92% of investors took advantage of the early superannuation withdrawal scheme. 

"While the financial challenges have been plenty over recent months, property investors have generally been able to manage their cash flows and expenses over the period," he said.

"About 16% of investors had tenants who applied for a rent reduction or holiday during the pandemic with about 47% of requests proving to be eligible under the relevant state-based legislation."


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.

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Alex joined Savings.com.au as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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