A Galaxy Research survey of 1,005 people nationwide, conducted on behalf of State Custodians found that almost two in three Aussies (65 per cent) want to purchase an investment property.
More than one third of Aussies (34 per cent) want an investment property because they see it as the best investment to get ahead in life as you can build wealth as the property increases in value.
Many are considering a long-term strategy with 26 per cent saying they want to build wealth for retirement through property investing as they doubt they’ll have enough super. Furthermore, 20 per cent say they want an investment property as they feel there’s too much uncertainty around superannuation as the Government keeps changing the rules. Some 22 per cent want to buy an investment property to have something to leave to their kids as inheritance.
Gen Y most keen for an investment property
Generation Y in the 18 – 34 age bracket expressed the strongest desire with a whopping 82 per cent saying securing an investment property is important to them. Generation X-ers aged 35 – 49 also have a keen interest at 74 per cent, followed by older Australians aged 50 years plus at 47 per cent.
“The incredible performance of the property market is a hot topic,” says State Custodians general manager Joanna Pretty. “Being able to take advantage of the financial gains associated with that performance is a very attractive option for a lot of Australians."
“In particular, young people are realising that it’s not so easy to buy where they want to live. Areas that close to work which provide a great lifestyle tend to be more expensive. Investment properties allow them to get into the property market in more affordable areas, whilst they continue renting in their desired location.”
Ms Pretty says that investment loans are a sizeable portion of State Custodians’ business and make up around 30 – 40 per cent of applications. This has continued to increase over time. “Customers view property investment very favourably as is it tangible bricks and mortar but it can also be used in a variety of ways – to produce an income, to make capital gains or as a retirement option. It is this flexibility that makes owing an investment property so compelling.”
With many young people scrambling to get a foothold in the market, 13 per cent of respondents want to buy an investment property to later sell to help their kids with a deposit for their own home. The same amount is also interested in negatively gearing any losses from an investment property, and 9 per cent say they could eventually sell the investment property to specifically fund a big expense such as renovations, private school fees or a new business.
Major city dwellers want to get investment foothold
In general, people in major capital cities (69 per cent) say they are more interested in an investment property than those in regional areas (60 per cent). Specifically, Sydneysiders (74 per cent) have the most interest nationwide - significantly more than their counterparts in rural New South Wales (61 per cent). Dwellers in Australia’s next biggest city Melbourne registered 68 per cent compared to 57 per cent of regional Victoria. Some 66 per cent of Brisbane dwellers are interested in investment property ownership compared to the rest of Queensland (61 per cent).
For those still wondering whether to take the plunge, Ms Pretty says the key to success with any investment strategy is knowledge. “Start researching the property market movements so you can begin to identify areas that might provide great investment returns,” she suggests. “Talk to a buyer’s agent or other real estate experts about areas you’re interested in, and visit an accountant or financial planner to help you work out whether investing in property is best for your situation.”