· 68% of investors surveyed state the COVID-19 pandemic had no impact on their likelihood of investing
· 16% of investors more likely to invest since the COVID-19 pandemic
· Investor sentiment highest in Perth and Brisbane
Results from the latest sentiment survey by Perth-based property investment consultancy, Momentum Wealth reveal the COVID-19 pandemic has had minimal impact on burgeoning confidence amongst property investors.
Responses to their annual property sentiment survey, which was completed by 467 investors across Australia, demonstrated the resilience of investor confidence, with 68% of respondents stating that the COVID-19 pandemic had not impacted their plans to invest in real estate.
A further 16% of those surveyed stated the pandemic had actually increased their likelihood of investing, with 43% of this cohort actively planning to invest within the next 12-months.
Momentum Wealth General Manager, Jennifer Wakeman, said that Australian investors have a natural affinity for real estate, driven in part by its long-term performance as an asset class.
“Historically, property has shown lower volatility than other asset classes, especially during periods of economic uncertainty and instability, and the rising prices we are seeing across Australia’s capital city markets is further evidence of this.”
Low interest rates creating opportunity for investors
Despite the economic headwinds caused by the pandemic, buyers have benefited from a number of stimulus initiatives aimed at reducing the economic impact of COVID-19.
Ms Wakeman said the Reserve Bank of Australia’s decision to cut the official interest rate as a measure to counteract rising unemployment has created a window of opportunity for buyers.
“The cost of borrowing money decreased as a result of interest rate cuts, and those fortunate enough to have secure income are able to leverage these conditions to purchase or invest in property.”
“Despite the economic downturn, job losses have largely been constrained to a few industries and most of these jobs have since been recovered. The strengthening of the economy has also led to many people being in a better financial position than was first predicted.”
Not all markets are equal
Despite sustained investor sentiment throughout the pandemic, Ms Wakeman said confidence doesn’t extend across all areas of the market.
“Demand in the Sydney and Melbourne property markets are heavily reliant upon immigration, and these inner-city markets have softened as a result of international border closures,” Ms Wakeman said.
“Investor activity is turning away from Sydney and Melbourne and is instead focussing on cities with tighter rental markets and greater affordability, like Perth and Brisbane.”
“Investors who enter the Perth and Brisbane markets will benefit from the forecast upswing and the current affordability and tight rental markets are presenting dual benefits for investors.”