- The pandemic has permanently changed the way Aussies invest
- Statistics show that during 2021, the distance between where people live and where they invest doubled
- Queensland continued to be the state attracting the most borderless investors
I get it! Enough with the pandemic already! We’re tired of its constant filling of the airwaves and column inches. There’s been speculation, uncertainty, facts and fallacies all wrapped up in the neat package of COVID… and it’s bloody exhausting.
However, I ask you to set aside your fatigue for just a moment.
You see, there are some very real and palpable ways this significant historic event has changed our country. Like wars, political upheaval, technological advances and the release of a really tasty sauvignon blanc, Coronavirus has changed how we see the world.
And this is exactly what’s happened in the property investment sphere. In fact, for landlords, the virus has actually broken down borders, not reinforced them.
I’ve been running some numbers and they reveal a significant shift in how Aussies have invested in response to virus measures.
I love a good set of stats. They allow me to flex my mental muscle, no doubt impressing all who come into my orbit. Truthfully, it’s bloody magnificent what I can do with a group of numbers and some justifiable assumptions.
So, with this unrealistic bravado secured, I recently completed a follow up to my Property vs. Postal analysis from the end of 2020..
The study draws on information we gather when preparing depreciation reports. Among the materials collected are the home addresses and investment property locations of each client.
This paints a very real picture of Aussie attitudes toward investing away from a home suburb or city.
I compared the figures for the 12 months to November 2021, to those from our January 2020 calculations and they reveal some notable outcomes.
Property vs. Postal
|% of investors||Jan 2020||Nov 2021|
|Invest in same suburb*||6.90%||6.75%|
|is more than 200km?||29.50%||44.65%|
|is more than 1000km?||7.70%||17.15%|
|is less than 50km?||60.10%||41.12%|
|is less than 10km?||36.10%||19.10%|
|is less than 5km?||23.20%||11.56%|
|is less than 2km?||10.80%||4.99%|
|Average Distance (km)||293.47||559.09|
Source: MCG Quantity Surveyors.
*Principal Place of Residence
Firstly, it seems the pandemic has pushed Aussies to embrace borderless investing in a mighty way. Our figures suggest the distance between people’s homes and where they choose to invest has almost doubled in the wake of COVID.
The numbers showed the average distance between a landlord’s home and their investment property had risen from 294 kilometres to 559 kilometres over the pandemic period. Property investors didn’t scurry under the doona and live in fear.
Instead, Coronavirus was just the butt-kicking some needed to start treating the nation’s property scene as one big market full of varied and attractive opportunities.
Another telling outcome of the study is the rapid rise in those looking for assets positioned exceptional distances from their homes. Buyers investing in locations more than 200 kilometres from where they live rose from 29.5% in January 2020 to 44.65% in November 2021.
Even more dramatically, the percentage investing greater than 1000 kilometres from home more than doubled during the period.
Now I’m not one to blow my own trumpet (…who am I kidding, of course I am!) but this was very much in line with predictions we made last year. Way back then we’re on record as saying Australians would embrace the idea of ‘going national’ in property searches.
The other telling outcomes were about where people are buying. Based on all the commentary running around the place at present, it should come as no surprise investors are flocking to Queensland, with 37.44% of the analysed clients buying there. This was followed by New South Wales with 34.31 per cent.
Victoria saw just 11.31% of the investor pool, while the rest of Australia made up the remaining 15.94%.
Why we’ve moved on
There are a few reasons why the pandemic has, in my opinion, accelerated ‘investor mobility’ and created a borderless Australia.
First up, COVID got us all thinking long and hard about our financial security. The unknown was thrust upon us in a matter of days – we’re we ready? This saw investors get active looking after their affairs and preparing for the future.
Next, we had to embrace adaption and innovation on a large scale. Things like work from home and online shopping became the norm. Suddenly anything could be done from the security of your lounge chair, so why not property investing?
This was great for smart buyers. The whole nation – not just the bits they knew – became their market. They could take advantage of anything from regional centres through to capital city opportunities.
In fact, capital growth rates in many regional centres rivalled or exceeded big cities in 2021 and investors wanted to get a piece of this action despite being stuck at home.
In the same vein, service providers had to find ways to overcome distance, engage with clients and meet their needs. More and more local experts learned how to connect with their national client base. Video walkthroughs, Zoom conferences, shareable documents, online transfers… the technology and its adoption really stepped up.
Many of these platforms were already available for use, but COVID meant you either utilised the options or were left floundering.
Finally, it’s very easy to outsource your buying and due diligence to local buyers’ agents in the modern world. Investors can rely on their advice about where and what to buy, and they are all about the numbers, not the emotional ties of location.
My take is that while the post-pandemic world will deliver more freedom to travel, remote purchasing is here to stay. Expect savvy buyers to continue jumping on opportunities no matter where they are.
The main danger will be ensuring investors can find and use reliable, trustworthy sources of information. If that hurdle can be cleared, expect Mrs Jones from down the road to be investing anywhere from Byron to Broome as part of her property portfolio’s growth.