Brisbane and Perth have emerged as new property investment hotspots as investor interest shifts from the Sydney and Melbourne markets.
According to a recent report by property investment consultancy, Momentum Wealth, which surveyed 483 investors across Australia, Brisbane and Perth are leading the pack when it comes to investor preference, as 36 per cent and 33 per cent of survey respondents picked the respective capital cities as the best places to invest.
Team Leader of Momentum Wealth’s buyer’s agents Emma Everett said a combination of affordability and potential growth opportunities are contributing to higher levels of investor interest in the capital city markets.
“Whilst both markets offer strong levels of affordability compared to Sydney and Melbourne, they also hold promising opportunities for long-term growth, with Brisbane already experiencing overall price growth and areas of Perth performing strongly as the market enters its recovery,” she said.
Ms Everett believes that investors looking to take advantage of current conditions must remain vigilant in their property research and selection.
“In these early stages of recovery, it’s not uncommon for different areas of the market to experience price growth at different times, so investors will need to remain diligent in their research to ensure they are selecting an area that aligns with both their investment strategy and growth expectations,” she explained.
The survey also highlighted that professional service firms were regarded as the most credible source of information when researching the property market, compared to only 1 per cent of investors who ranked friends and family as the best source of property research.
Hometown confidence hits a new high in WA
While Perth was considered to be the best place to buy amongst respondents overall, the survey also highlighted a considerable rise in state confidence as 70 per cent of Western Australian investors found Perth to be the most appealing capital city to invest in.
Ms Everett said renewed confidence is already leading to price growth in some areas, but warns investors to act fast to avoid rising levels of buyer competition.
“Perth is offering some great buying opportunities for investors looking to take advantage of current levels of affordability, but those looking towards high-demand suburbs will need to move quickly or risk entering the market when competition levels have already picked up.”
“We are already seeing significant evidence of this in some areas of the market, with increased activity from trade-up buyers resulting in significant price growth in Perth’s central sub-region across the past 18 months,” she said.
Lending restrictions remain a barrier for investors
While investors are recognising the potential benefits of entering the market, lending restrictions continue to pose a barrier for some, with several investors finding increasing difficulty in securing finance considering recent APRA changes and the Banking Royal Commission.
The survey results outlined that 67 per cent of respondents had reviewed their loans in the 12 months to November 2018, an 8 per cent increase on last year’s results.
Team Leader of Momentum Wealth’s mortgage broking team Caylum Merrick said the challenging lending conditions highlight the importance of regular loan reviews in ensuring investors continue to receive the support they need.
“In today’s lending environment, and in any lending environment for that matter, it’s vital that investors conduct regular loan reviews to ensure they are still receiving the best rates and products to support their investment goals.”
“Whilst we’ve seen record low interest rates in recent years, we’ve also seen a number of buyers impacted by changing lending restrictions. With many banks now raising their interest rates outside the RBA cycle, it’s more important than ever that investors keep their finger on the pulse,” Mr Merrick said.