Majority of property investors positive and think now is a good time to buy, industry survey finds

Property investors are demonstrably more positive about real estate than a year ago, according to a new industry survey, despite having experienced the biggest price downturn in almost two decades.

With the nation’s property market’s recent recovery, a whopping 82 per cent of property investors believed that now was a good time to invest in residential property, the 2019 Property Investment Professionals of Australia Property Investor Sentiment Survey, released on Thursday, found. That figure was up from 77 per cent in 2018.

Three-quarters of investors surveyed did not vote for Labor in the May federal election because of the party’s proposed changes to negative gearing and capital gains tax.

“Labor lost the unlosable election,” the group’s chairman, Peter Koulizos, said. “Investors played a big role in who won in the last federal election. There was a lot of worry leading up to the election.

“The silver lining to property prices falling is you can buy undervalued property. But there was no silver lining to changes to capital gains tax and negative gearing.”

One-quarter of investors were now unable to refinance an amount they were able to borrow before the banking royal commission. Nearly 60 per cent of property investors are considering non-bank lenders after the royal commission, the survey of 1200 investors and conducted in September found.

Mr Koulizos said investors had turned to non-bank lenders due to the negative publicity about banks as well as tightened lending conditions.

“At the end of the day, most investors simply want to borrow the money, and if they have to pay half a per cent more, it’s just a cost of doing business,” Mr Koulizos said. 

The survey found the two main concerns for property investors were access to credit and Australia’s economic conditions, and not falling house prices.

About 78 per cent of investors said they would not put their investment plans on hold because of falling house prices. But the number of investors who bought property in the past 12 months was down to 34 per cent from 43 per cent last year.

Brisbane remained the favoured city in which to buy an investment property, with 44 per cent of investors choosing it over Melbourne (27 per cent) and Sydney (14 per cent).

“One of the main reasons is because Sydneysiders can’t afford to buy property in their own city, so they look north to Brisbane where it’s about half price,” Mr Koulizos said. 

“If you can find yourself an undervalued property in an undervalued market, that’s where you can make quick money.”

Brisbane is set for the biggest rise in house prices of any capital city over the next three years, according to a BIS Oxford Economics report.

An overwhelming 93 per cent of investors wanted greater professional standards for people handing out property investment advice.

But Mr Koulizos was quick to point out the property market was not returning to boom times anytime soon, and anyone who suggested otherwise was not telling the truth.

“Unfortunately, there are property spruikers that are giving false hope to people then they put the hard sell on them,” he said. “Generally, they’re selling off-the-plan apartments and new land and house packages.

“There is no boom on the horizon, and one of the telltale signs is if the Reserve Bank dropped interest rates again. It would be because the economy and the property market is not doing well. 

“Otherwise, they would be thinking of raising interest rates.”