27 July 2015
More than half of respondents to MRD’s Australian Property Investor Survey indicated the Sunshine State was where their next investment would be.
Queensland outstripped its rival states of New South Wales, Victoria and Western Australia in popularity by four to one, South Australia by 6 to 1, Tasmania by 32 to 1, and the Northern Territory and the Australian Capital Territory by 48 to 1.
WA was the second choice behind Queensland, but it was a distant second, with only 13.61 per cent of respondents indicating the state was their preferred investment location.
Nick Lockhart, MRD Partners’ Managing Director, said it was no surprise Queensland was the focus for investors going forward.
He said there had been plenty of speculation over the past 18 months pointing to South East Queensland in particular as the place to invest, largely because it was long overdue for an upturn.
“Investors know all markets go through what we call a ‘property cycle’, where there is typically a boom, followed by a flat market and some price correction before it lifts again, and Brisbane is the only capital not to have experienced a substantial lift since the GFC,” Mr Lockhart said. “The Brisbane market has moved from recovery to growth but has not yet entered what we could call a ‘boom’ market, so there is plenty of opportunity for people to get in now and buy before that growth comes.”
Survey respondents indicated they believed the Queensland market was ‘on the comeback’, along with the Australian Capital Territory, South Australia and Tasmania.
New South Wales and Victoria were considered to be at the top of the cycle, while the property market in Western Australia and the Northern Territory were labelled as ‘in a slump’.
Mr Lockhart noted that the WA property market had recently stagnated – or fallen in some instances – due to the slowdown in mining, which was creating opportunities in the state for investors.
But he also noted the majority of investors who indicated a desire to buy in WA were those from the state, which was evidence of a preference to buy “in their own backyard”.
“Alongside Western Australia, New South Wales and Victoria were also high on the shopping list for investors, which was to be expected,” he added. “Even though these states have experienced significant growth recently, they will always be popular markets as they have a history of strong growth.”
MRD’s survey found the majority of property investors were positive about the market, with more than 51 per cent of respondents indicating they would buy over the coming year and 50 per cent indicating they believed negative gearing would remain despite recent political debate about its possible removal.
Investors from the Australian Capital Territory expressed the highest sentiment, with 89 per cent wanting to buy in the next year, followed by those from NSW at 66 per cent.
Western Australia, South Australia and Tasmania were the only states where the majority of investors indicated they did not want to buy over the next 12 months.
Investors surveyed preferred to buy a house and land (62.8 per cent) as opposed to townhouses (15.46 per cent) and units/apartments (14.01 per cent), and were almost equally split on whether they preferred to buy in the inner city (47.34%) or in areas further from CBDs (45.41%).
“People still believe the value of a property investment is in the land,” Mr Lockhart said. “As medium density has given way to higher density – that is, as bigger apartment blocks and townhouse complexes are being built – there has been a shift back to single-dwelling homes. In the past two decades master-planned housing estates have sprung up making housing further from our CBDs more appealing. With them comes a mixture of retail and commercial facilities, as well as residential housing, usually with lakes, parks, community facilities, schools, hospitals and bikeways.”