Despite the financial fallout of the pandemic this year, a good chunk of Australians still believe the time is nigh to invest in property
New research by ING surveying over 2,000 Australians found
there is still some positive feeling about the property market.
According
to the research, over a quarter (26%) of Australians believe now is the best
time to enter the investment property market and 44% still see property as a
strong investment option.
This number is higher among millennials (50%), with low-interest rates
(32%) and the prospect of lower house prices (27%) among the key reasons for
the desire to buy an investment property.
With many Aussies saving more (37%) and spending less (40%) during the
pandemic months, ING Head of Home loans Julie-Anne Bosich said Aussies are
cautiously thinking about ways to invest to take greater control of their
financial future.
"While, understandably, not everyone is in a position to use their
finances to invest, our research has found that for those who are, the
preferred investment choice is property, especially in the current climate
where interest rates are at a record low," Ms. Bosich said.
House prices on a fifth straight month of decline
This keenness to buy an investment property coincides with yet another
month of house price declines in September.
CoreLogic found that despite prices improving marginally in most capital
cities, Sydney and Melbourne, which account for 40% of the housing stock and
55% by value, dragged the national median house price down for the fifth
straight month.
CoreLogic Head of Asia Pacific Research Tim Lawless, said Melbourne
remains the main drag on the headline results.
"By far the weakest result across the capital cities, Melbourne housing
values were down 0.9% in September," Mr Lawless said.
"Since peaking in March, Melbourne values are down 5.5%. With
restrictions starting to lift and private home inspections once again
permitted, we expect to see activity lift in October.”
As restrictions in Melbourne are now starting to ease, listings
there have skyrocketed.
After Premier Daniel Andrews' announcement on September 28 that private
real estate inspections would be allowed, CoreLogic also found the number of new property listings added to the market for sale increased by
330% in the four weeks ending 18th October.
"After months of restrictions, pent-up demand from sellers has
accumulated so much, that more stock was recently added for sale in Melbourne
than any other capital city region," CoreLogic head of Australian
Research Eliza Owen said.
ING's research found Melbourne is in fact the most sought after
destination for these would-be buyers.
28% of investors are planning to buy in Melbourne, followed by Sydney (24%), Brisbane (17%), and the rest of New South Wales (16%).
Of NSW residents,42% are also considering buying outside of
Sydney.
Investing on the rise
The number of investor loans issued nationwide fell to its lowest level
since 2002 in May, according to the Australian Bureau of Statistics (ABS).
The latest data from the ABS for August 2020 shows
a 9.3% monthly gain, indicating investors may be returning to the market,
although investment levels are still 4.6% down year-on-year.
Low-interest rates are a factor for 32% of the would-be investors
surveyed by ING and with the cash rate set to be cut again by the Reserve Bank next month,
interest rates on both investment and owner-occupier home loans look set to
fall further.
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Jason Gwerder
Saturday, 31 October 2020
