The survey, details of which are copied below, also shows 37 per cent of respondents rated their level of confidence in the housing market as high to very high (6 per cent). However a majority of 55 per cent still voted it as moderate.
Queenslanders are the most hopeful, according to the survey, with 40 per cent of respondents saying confidence in their housing market is “very high”.
Australia’s largest independently-owned mortgage broker, Mortgage Choice has discovered that three quarters of Victorian residents planning to buy an investment property in the next two years are waiting until the First Home Owner Boost (FHOB) expires.
75% of the VIC respondents to the 2009 Property Investors Survey said they were delaying their upcoming investment property purchase until the FHOB finishes on 31 December 2009. Interestingly, before the extension was announced, only 23% were delaying their purchase until the initial completion date of 30 June 2009 had been reached.
Mortgage Choice senior corporate affairs manager, Kristy Sheppard said the survey highlights an observation made recently by many of the company’s franchisees.
“We have been hearing from a number of corners that property investors are all set and ready to go once the Boost has had its day. This appears to be the case in Victoria as well. Competition from first homebuyers has been so intense since late last year that most investors seem to have stepped back for the moment. A large number are calling our loan consultants to see how much money they can borrow from the various lenders on our panel and getting their finances in order, all in preparation for hitting the ground running to purchase in 2010 and 2011,” she said.
44% of the VIC respondents, all of whom are purchasing an investment property in the next two years, were Generation X*, 28% were Baby Boomers, 27% were Generation Y and 1% were Builders. VIC was on par with the national averages for each generation.
Over a third of the state’s respondents – 37% – rated their level of confidence in their housing market as ‘high’ (30%) to ‘very high’ (6%). 55% rated it ‘moderate’, 8% rated it ‘low’ and only 0.3% rated their confidence as ‘very low’.
Queensland respondents were the most confident in their housing market, with 40% saying high to very high, followed by VIC and then South Australia (36%).
According to VIC respondents, the areas around Australia that provide the best investment prospects over the coming two years were:
1. 45% – Within 15km of Melbourne metropolitan area
2. 37% – Within 15-50km of Melbourne metropolitan area
3. 4% – Outside 51km of Melbourne metropolitan area
4. 3% – Within 15km of Sydney metropolitan area
5. 2% – Within 15km of Darwin metropolitan area
6. 2% – Within 15km of Brisbane metropolitan area
7. 2% – Within 15-50km of Brisbane metropolitan area
VIC respondents were more likely to be considering purchasing a house (68%) than the national average (66%) and less likely to be considering a unit/apartment (49% comparing to 53% nationally). 29% said they were looking to buy a townhouse/terrace, 6% a commercial property and only 2% a duplex.
Three quarters saw property investment as a better bet than investing in shares. The top ten key motivators behind these respondents planning to buy an investment property were:
1. 90% – I want to set myself up financially for the future
2. 80% – The benefits of the current property market
3. 76% – Potential for housing price rises
4. 75% – I see more benefit in investing in property than I do in the share market
5. 71% – I have researched the property market and feel property investment will enable me to achieve my financial goals sooner/better
6. 70% – Currently-low interest rates
7. 70% – Tax benefits
8. 53% – Capital gain
9. 53% – Currently-high rental yields
10. 52% – Negative gearing
“It is great to see many of these upcoming investment property purchasers have lofty ambitions as market players. 16% of VIC respondents said they plan to create an investment property portfolio of ‘as many properties as possible’, 52% were looking to own two to three properties, 17% wanted only one investment property, 8% were planning on four to five and 3% were planning to own six to 10 investment properties,” Ms Sheppard said.
34% will purchase the investment property on their own while 59% will buy with a partner. 4% will purchase with a friend – the most of any state, 3% will purchase with a sibling and a further 1% with a parent.
Most buyers were looking a fair way into the future when it came to holding onto the property. Half (50%) of the VIC respondents said they were intending to keep it for 10 years or longer, while 39% were planning on five to 10 years and only 10% said up to five years.