Episode Details

When you look back on 2019, it's going to be a watershed year for property, a year of two halves.

At the beginning of the year everyone was very nervous about the future of our property markets.

At the end of the year there's so much more optimism.

Of course, there are still some economic issues and headwinds ahead for our property markets.

But we've recently conducted our annual Property Investor Sentiment Survey, so today, I want to share what 1,800 property investors are planning to do for 2020.

This will help you understand where you fit in with a wide range of other Australian investors as well as giving you a glimpse ahead, because investors do move our property markets.

Being Australia's longest-running and largest survey of Australian property investor sentiment, it showcases insights from property investors and would-be investors across the country.

Running since 2011, it offers rich and vibrant insights into how property consumer trends and sentiments have changed over time.

I'm joined today by Sarah Megginson, editor of Your Investment Property Magazine.

Investor profile shifted slightly:

• 2017 - 28% owned 5 or more properties
• 2019 - this had dropped to just 17% owning 5+
• We're not sure whether this reflects a drop in property ownership or a change in the type of people who are replying

Rentvestors:

• 16% of respondents were rentvestors in 2019
• Almost half (48%) the respondents would consider using it as a strategy to get into the market

Investment Strategy:

• Investing for "Long term capital growth" and "buy, add value and hold" remain the two most popular property investing strategies
• Long term growth was the no.1 strategy for 59% in 2017; 51% in 2018; 49% in 2019.
• Add value and hold the property largely unchanged, 20% in 2017; 19% in 2018; 19% in 2019 - so around 1 in 5 investors adopting this strategy

Sentiment:

• People remain positive, as the majority reported that now is a good time to buy property in 2017 (61%), 2018 (52%) and 2019 (68%).
• 19% of respondents plan to buy a new home in 2020 – the same as last year (2019). This was down from 23% in 2018 (but still higher than the number planning to buy a new home 3 years ago (14%)

Takeaways from our conversation:

• Watch out for analysis paralysis.
• Don't buy investment properties for tax benefits.
• Treat your investment properties as a business.
• Negative gearing is not an investment strategy.
• This is the best countercyclical opportunity to invest in a long time.
• Don't change your long-term strategy because of short-term circumstances.
• In today's tighter finance environment, living off equity is very difficult.
• If you want to outperform the averages, you need expert advice. But be careful who you ask.

Links and Resources:

Michael Yardney

Metropole Property Strategists

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