Melbourne skyline
Strong economic conditions will result in stronger property prices. Photo: Pat Whelen, Unsplash
  • Two-thirds of investors believed it was a good time to invest in residential property
  • 50 per cent of those surveyed planned to do so over the next year
  • New loan commitments ten times higher in Dec 20 then Dec 19
  • Six billion-worth of new investor loans recorded in December

A survey conducted by the Property Investment Professionals of Australia (PIPA) last August has shown that two-thirds of investors believed it was a good time to invest in residential property.

The same survey revealed that nearly 50 per cent intended to buy a property over the following year.

Peter Koulizos, Chairman of PIPA, said he had noticed stronger investment activity over the past few months and believes this will be ramped up further.

“The low point for investment activity was May last year, however, new loan commitments have grown since that time to be about 10 per cent higher in December than the same period the year before,” he said.

“In fact, the latest official data shows that more than $6 billion-worth of new investor loans were recorded in December – the highest level since July 2018.”

Mr Koulixos remarked with strong activity from owner-occupiers and first home buyers alike, more investors in the property market would cause an upward pressure in property prices across Australia.

“Part of the reason for dwelling price rises is the low supply of properties that are hitting the market, which was also foreshadowed in last year’s survey when 71 per cent of investors indicated that the pandemic had made them less likely to sell a property over the short-term,” he said.

Interestingly, the survey indicated that investors were more bullish about major regional areas and cities such as Brisbane as opposed to Melbourne and Sydney.

“Survey respondents also showed a sharp uptick in interest in regional areas as well as coastal locations,” Mr Koulizos said.

“Indeed, the proportion of investors that said regional markets were the most appealing increased to 22 per cent in 2020 from 15 per cent in 2019, with coastal locations also on the rise – up to nearly 12 per cent from eight per cent the year before.”

Mr Koulizos believes with the current conditions, property markets will remain strong for some time.

“If you add low supply levels as well as once in a generation interest rates into the mix, then property markets are set for strong conditions for the foreseeable future in my opinion.”

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