Low interest rates, capital growth opportunities and stability were three top factors investors were choosing to purchase property, with one industry expert stating many are taking advantage of the low interest rate to build on a property portfolio.
Chair of the Property Investment Professionals of Australia Ben Kingsley said there has been concerns that some markets are overheated. However, the survey results show investors don’t share that view.
“Certainly there has been strong price growth in some markets, but this is not the case right across the board and these survey results reinforce the fact property remains a firm investment favourite,” Mr Kingsley said.
“Investors recognise the long-term capital growth prospects property brings and they are taking advantage of a low interest rate environment to build their property portfolios.
“Unlike other asset classes property is not recognised as a financial product by ASIC, which means anyone is free to provide property investment advice… A lack of regulation leaves consumers vulnerable to unscrupulous operators, and this survey reveals that this is a chief concern for investors.”
More than half of those surveyed (56 per cent) said Brisbane was the hottest area for investment, an increase of 8 per cent from the start of 2014. Sydney followed at 13 per cent, Melbourne at 11 per cent and Perth at 9 per cent.
An overwhelming majority of respondents (80 per cent) said the government should be doing more to protect investors against property spruikers, with 87 per cent believing people who give property investment advice should hold a licence.
Mr Kingsley stressed the need for investors to carry out due diligence on any property purchase, adding anyone is free to provide property investment advice and a lack of regulation leaves consumers vulnerable to unscrupulous operators.
“PIPA is actively lobbying the federal government to bring property investment advice into a regulatory framework, but until such regulation is introduced, we will continue to provide the public with warnings about working with ethical and professional industry practitioners,” Mr Kingsley said.
The study, titled the Smart Property Investment/PIPA Property Investor Sentiment Survey, interviewed 627 people over August and September 2014.
Smart Property Investment managing editor Phillip Tarrant said the survey found a clear relationship between low interest rates and property investment activity.
“More than half of respondents felt their recent purchase decisions were accelerated by the low interest rate environment,” Mr Tarrant said.
“With interest rates unlikely to rise anytime soon, we may see strong property market activity continue for some time yet.”