MRD Survey reveals QLD most popular state for investors
Which state is the most popular for property investors to buy in? Well, according to the latest research by property investment group, MRD Partners, Queensland is now seeking a large amount of attention from property investors, with over half of the respondents to MRD’s Australian Property Investor Survey indicating that sunny Queensland is where they intend to buy in next.
The second most popular state for property investors to invest in was Western Australia, with just 13.61 per cent of respondents choosing to buy here for their next property purchase.
Behind WA was New South Wales and Victoria which appealed to 12.56 per cent of investors, followed by South Australia where 7.86 per cent of property investors would invest here.
In contrast, both the Northern Territory and the ACT were the least popular places to invest with just 1.05 per cent of investors seeking to invest in these two states.
According to Nick Lockhart, MRD Partners’ Managing Director, it came as no surprise that investors were focusing on Queensland, especially as the state is long overdue for an upturn and there has been plenty of speculation over the last 18 months, particularly in South East Queensland.
“Investors know all markets go through what we call a ‘property cycle’, where there is typically a boom, followed by a flat market and some price correction before it lifts again, and Brisbane is the only capital not to have experienced a substantial lift since the GFC,” Mr Lockhart said.
He also added, “The Brisbane market has moved from recovery to growth but has not yet entered what we could call a ‘boom’ market, so there is plenty of opportunity for people to get in now and buy before that growth comes.”
It is believed by a large number of respondents that Queensland is the next best place to invest in and that there is still value here, whilst both New South Wales and Victoria have reached the peak of their cycles and properties are becoming less affordable, particularly in Sydney. In spite of this though, New South Wales and Victoria will always remain appealing for investors as they have had a long history of strong growth.
Western Australia and the Northern Territory are both indicated as being in a ‘slump’ phase of the property cycle and due to the slowdown in mining activity, the WA property market has stagnated, which in turn is creating opportunities for investors. However, most of those who are interested in investing in WA also live here.
As well as WA, investors living in Victoria, South Australia and Tasmania said that they would be more likely to invest in their home markets rather than interstate, whilst investors in ACT, New South Wales, Northern Territory and Queensland were very interested in investing in the Queensland property market.
So what type of residential housing are these property investors preferring to buy? Well, according to the survey, the majority of investors still want to buy a house and land package (62.8 per cent). Townhouses are the next preferred investment opportunity (15.46 per cent) followed by units and apartments (14.01 per cent).
There is still a strong belief that having a sizeable amount of land holds the value of a property investment and Mr Lockhart suggests, “As medium density has given way to higher density – that is, as bigger apartment blocks and townhouse complexes are being built – there has been a shift back to single-dwelling homes.”
Interestingly though, investors are almost equally split when it comes to investing in the inner city (47.34 per cent) or in suburbs further out of the CBD (45.41 per cent). In spite of this though, those looking to live in units and apartments do so because of convenience and more and more people want to live closer to their workplace and modes of public transport and important amenities such as schools and hospitals which will help these properties rent out to the workforce.
When it comes to negative gearing, then half of the respondents believed that negative gearing would remain, even though there has been lots of political debate about whether it should stay or be abolished.
Even though some property markets have stagnated and others are booming, the majority of investors from MRD’s survey (over 51 per cent) said that they are looking to buy over the next 12 months. Surprisingly, 89 per cent of investors from ACT said that they would buy in the next year, followed by investors from NSW (66 per cent). This eagerness to buy is helped by the fact that interest rates are currently at an all-time low making mortgage repayments much more appealing.
In comparison, the majority of investors from Western Australia, South Australia and Tasmania indicated that they would not be buying an investment property over the next 12 months.
Published on 28th of July 2015 by Marty Stanowich