As the property investment markets in Melbourne and Sydney began to look uneasy in mid – 2017, Australian property investors were among the first to lose their confidence.
However, following the result of the Australian federal election — which killed off Labor’s capital gains tax and negative gearing policies — this has given investors a renewed confidence.
The chairman of Property Investment Professionals of Australia, said there had been a strong uplift in buyer confidence, with price increases noticed in both Sydney and Melbourne.
The organisation has just released the results of a survey of its members, which found that 82 percent of investors believe it is now a good time to buy residential property again.
About 48 per cent of members surveyed plan to purchase in the next six to 6-12 months, the survey found.
This return of confidence, combined with increased activity from other buyers — especially first purchases — indicates that a market recovery is on it’s way.
“Signs of recovery in the residential investment property market have been on the way for some months now with confidence turning around convincingly in May,” ANZ Senior Economist Felicity Emmett said.
“Since then, auction clearance rates have improved significantly and property prices have been rising strongly in both Melbourne and Sydney, and housing finance is also starting to grow significantly.”
Mr P. Koulizos, from Property Investment Professionals said that Labors policies during the election campaign united his members, with the results showing an overwhelming 75 percent of members voted against the party, purely based on their property policies.
Reflecting the uncertainty surrounding the May poll, the PIPA survey of its members found just 34 percent had purchased an investment property in the past 12 months.
One sector of the property market that is not firing is the construction sector, which has been in decline for over a year now.
However, Ms Emmett said that growth seen elsewhere in property markets would eventually flow through to the construction sector.
“The continued improvement in credit availability suggests that construction activity, and not just prices, should begin to pick up in the coming months,” she said.
While investor outlook concerning the market is largely confident, there’s considerable uncertainty about the state of the Australian economy, she said.
It was one of two issues of great concern for those surveyed, alongside difficulty accessing lending, she cited.