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When it comes to reasons for investing in property, Western Australians are the most concerned with setting themselves up for the future while Victorians follow their parents’ success in the market.
Mortgage Choice’s 2015 Investor Survey, conducted last month, analysed the responses of 1,025 first-time property investors, who had either recently purchased or are actively planning to do so within the next two years. Results were analysed from the five largest states (NSW, Victoria, Queensland, Western Australia and South Australia).
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Overall, 75.8 per cent declared that setting themselves up for the future was a key factor in seeking to invest in property. The other most popular reasons for investing in property were planning for retirement (57.4 per cent), seeing more benefits in property than shares (44 per cent) and tax benefits (38.7 per cent).
Interestingly, the results reveal some significant differences across the states in terms of what motivates people to invest in property.
Western Australians are the most inclined to plan for the future, with 82.8 per cent listing this as a driving force for their investment decisions, while Victorians were the least, albeit with a still respectable 71.2 per cent.
This also explains why just under half of Victorians (49.8 per cent) used property to plan for retirement, compared to nearly two-thirds (63.7 per cent) in South Australia.
Victorians, however, led the charge when it came to following parents’ success in real estate, with 16.6 per cent citing this a driving factor in their own intentions – nearly double that of Queenslanders (9.2 per cent).
Somewhat less surprising was that NSW residents were most inclined to say that being unable to afford to buy a home to live in (19 per cent) pushed them into buying as an investment instead. Being pressured by family or partners (16.5 per cent) and receiving advice from loved ones or a financial adviser (27.5 per cent) also encouraged more people from NSW to get their foot onto the property ladder than those in any other state.
In terms of the gearing of property, the survey revealed positive gearing is most popular in Queensland, while negative gearing is most in favour in Victoria.
Meanwhile South Australians were the most generous, with 27.4 per cent citing the desire to build a portfolio to pass on to beneficiaries as a factor behind their investment intentions – nearly twice those in NSW (15.5 per cent).
“So long as Australians buy the right investment property, property investment can be a great way for someone to future-proof their wealth,” said Mortgage Choice CEO John Flavell.
“Of course, finding the right investment property can seem like a daunting task – especially for first-time buyers.”
When it comes to finding the right property for an investment, Mortgage Choice urges investors to look at desirable streets and suburbs, regularly revisit their finance strategy to ensure it remains feasible, do plenty of research on local demographics and rental income/vacancy rates and also look out for cheap and easy fixes that will boost rental income or capital growth.
[Related: Top broker sees impact of market changes]
