Dec 18, 2017
What is ahead for 2018?
I will give some of my predictions at the end of the show, but first we are going to talk about this year's Property Investment Sentiment Survey.
To help discuss this I’m joined by Metropole Property Strategist Ahmad Imam because sentiment plays a big role in how the property markets perform.
2017 Property Investor Sentiment Survey
Over 2,200 Australians have taken part in this year’s Property Investor Sentiment Survey run by Michael Yardney’s Property Update in conjunction with Your Investment Property magazine.
Being Australia’s longest-running and largest survey of Australian property investor sentiment, it showcases insights from 2,250 property investors and would be investors across the country. Running since 2011, it offers rich and vibrant insights into how property consumer trends and sentiments have changed over time.
One of the surprises is that despite our property markets moving to the next phase of the cycle and slowing down 1 in 2 investors plan to buy a property in the next 12 months.
However, they are realistic that they won’t enjoy quick and massive capital growth in the near future, but they still intend to buy more property in the next year.
It’s clear that property buyers are intending to remain as active as ever, despite the fact that the boom is now well and truly over in Sydney, and strong growth isn’t widely anticipated in 2018.
Our survey reveals that 50% of respondents plan to buy another property in the next 12 months, and 60% believe now is a good time to buy property.
This is despite the fact that the majority of respondents (64%) believe that property prices will remain flat, or increase by less than 5%, over the next year.
It’s also interesting to note where investors are planning to buy: more than half the respondents believe that Melbourne will exhibit the best capital growth over the next 5 years (52%), with Brisbane not far behind (45%).”
Their focus is on long-term capital growth, rather than an immediate equity boost, and they’re looking at property that has potential to add value,
Perhaps unsurprisingly, it also reveals that many investors are feeling the impact of APRA-led lending restrictions.
“Around half of the respondents reported that the recent changes to lending policy have impacted their ability to purchase another property, while 36% say that meeting the banks stricter serviceability criteria will be their biggest stumbling block to purchasing a property,” said Sarah Megginson, editor of Your Investment Property magazine.
Q1. How many investment properties do you currently have in your portfolio?
Q2. What is your preferred investment strategy?
Q3. Is your property investment portfolio negatively geared or does it generate positive cash flow?
Q4. Do you believe now is good time to invest in residential property?
Q5. Are you planning to buy an investment property in the next 12 months?
Q6. What type of property would you buy?
Q7. Would you buy?
Q8. Where would you buy for the best capital growth over the next 5 years?
Q9. What type of property do you think will make the best investment over the next 5 years?
Q10. What is your property investment “end game”?
Q.11 Are you planning to buy a new home in 2018?
Q12. Have the recent changes in lending policies to investors impacted your ability to purchase another property?
Q13. What will be your biggest stumbling block to purchasing your next property?
Q14. Do you think now is a good time to fix interest rates?
Q 15. What do you think will happen to overall property prices in 2018?
Investors are less confident in short term capital growth than last year - 64% believe that property prices will remain flat, or increase by less than 5%, over the next year.
Q 16. Who’s advice do you seek (or plan to seek) for property investment advice?
While 26% of respondents plan to seek advice from a property strategist or an advisor we find it surprising that 25% will seek no advice on their next property purchase. Despite the significant amount of research material and information available for free, there’s one thing you can’t get over the internet – and that’s the perspective that only comes after years of on the ground experience.
Q 17. Your gender?
I’ve always been surprised that despite our readership being relatively evenly split amongst males and females, that significantly more males complete surveys.
Q 18. What is your combined annual household income?
About the survey:
The 2017 Property Investor Sentiment Survey was conducted online by Michael Yardney’s Property Update and Your Investment Property Magazine This survey was first conducted in February 2011 and this year 2,239 respondents answered questions at www.PropertySentiment.com.au, making it Australia’s longest running and largest survey of its type and giving us an insight into the way Australia property investors feel and think about the market.
Michael’s Predictions for 2018:
If interest rates remain unchanged, APRA don’t impose further lending restrictions and our economic growth remains steady, in the absence of any major international surprises this is what our research suggests is likely to occur to capital city property values in 2018:
Links and resources:
“What’s going to happen in the property markets depends on what the RBA does to interest rates and what APRA does to lending criteria.” Michael Yardney
“Overall houses are going to do better than apartments in Sydney.” Michael Yardney
“I see a little more growth in Brisbane in the coming year then there was last year.” Michael Yardney
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