Real estate investors are recovering and staying here

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A new poll found that more than three-quarters of investors believe home prices in their state or territory will rise over the next year.

Property Investment Professionals Australia’s (PIPA) Annual Property Investor Sentiment Survey 2021 surveyed Australia’s existing and emerging property investors to uncover sentiment, confidence and key trends in the Australian property investment market.

Last year’s survey pointed to the booming real estate market, and this year’s survey shows that investors expect prices to continue to rise.

PIPA Chairman Peter Koulizos said few people believed the positive investor sentiment in last year’s survey.

“When we think back to last year, which was a time of fear and uncertainty, it is clear that real estate investors and the market in general have weathered this tumultuous time better than anyone dared hope,” said Koulizos.

“Still, last year’s survey predicted the strong house price growth we’ve seen since then. Except that not many people believed us back then.”

When asked where property prices in their home state or area will go in the next 12 months:

  • More than three quarters (76%) of respondents said prices would rise, compared to 41% last year.
  • About a sixth (16%) thought they would stay the same, up from 33% last year.
  • Only 6% thought prices would go down, compared to 24% last year.

PIPA’s survey gathered responses from 786 real estate investors.


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Main results

Investors still believe the time is good to invest

Almost 62% of investors believe now is a good time to start investing in residential real estate, up from 67% in 2020. This could be due to the high real estate price growth as well as the significant lockdowns that were taking place at the time of the survey.

Australia’s house price growth of 16.4% for the year ending June means the annual pace has remained as fast as it has been since 2003 and the average house price at its highest since 2009.

CoreLogic estimates that nearly 600,000 homes have been sold in the past 12 months – the highest number of annual sales since 2004.

This corresponds to an increase of 42% compared to the annual sales figures for the past 12 months.

Sunshine State offers the best investment prospects

Queensland emerged as the winner by a wide margin, with a staggering 58% of investors believing the Sunshine State will have the best real estate investment prospects next year – up from 36% last year. New South Wales was in second place at 16% (up from 21% in 2020) and Victoria in third place at 10%, significantly less than last year’s 27%.

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Source: PIPA

Regional and coastal markets with growing demand

While investors continue to give metropolitan markets the best investment prospects with almost 50% (but from 61% in 2020), regional markets are favored by 25% of investors (from 22%) and coastal locations with 21. preferred% of survey participants (strong increase compared to 12% in the previous year).

The regional boom of the past twelve months is a clear indication that investors and homeowners have tried to escape the cities.

Increased flexibility in working from home and hard locks in large cities have both contributed to this trend.

Boundless investing is growing in popularity, with 44% of investors looking to buy outside of the state they live in (up from 41% last year).

Lending and the economy remain major investor concerns

The two main concerns of the surveyed investors were access to credit and Australian economic conditions – the same situation as last year.

Around 22% of respondents were unable to refinance an amount they had previously borrowed – just as they were last year.

Around 50% (compared to 43% in 2020) said they could refinance.

About 14% of investors say they are currently spending more money than they come in – the same result as last year.

Investors are looking for qualified advisors

The majority of investors (92%) continue to believe that any real estate investment advisory service provider should have formal education or training. 35% of investors have used the services of Qualified Property Investment Advisers or QPIAs.

About 39% said they took a hold-and-never-sell approach, which is well below the 51% seen last year.

About 35% said they are considering selling part or all of the portfolio (up from 27% in 2020).


Image by Patrick Ryan via Unsplash

When selecting the above products, the entire market was not considered. Rather, a stripped-down portion of the market was considered, including retail products from at least the four major banks, the ten largest customer-owned institutions, and Australia’s larger non-banks:

Some vendors’ products may not be available in all states. In order to be considered, the product and the price must be clearly published on the product provider’s website.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To learn how Savings.com.au handles potential conflicts of interest and how we are paid, please click through the website links.

*Comparison rate is based on a $ 150,000 loan over 25 years. Please note that the comparison price only applies to the examples given. Different loan amounts and terms lead to different comparison rates. Costs such as redemption fees and cost savings such as fee exemptions are not included in the comparison price, but can affect the cost of the loan.


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