A new survey reveals some of the drivers of residential property investors in Australia.
LJ Hooker recently undertook a survey of landlords across Australia to find out the who, what and where of property investors.
Landlords view capital growth as more important than rental returns when investing in property, according to the research, with more than one in four (27%) landlords saying capital growth was their main motivation for investing in property, while only 15% nominated rental income.
But 58% of respondents said ideally they were looking for the right balance between price growth and yield.
LJ Hooker national research manager Mathew Tiller said the findings to the real estate group’s 2015 Investor/Tenant Survey underlined the long-term vision investors took to property.
“Securing a regular income stream via rental returns is not the primary reason investors seek out property,’’ said Tiller. “The findings indicate capital growth and rental returns in combination are overwhelmingly desired, but a weekly income stream on its own is not a discernible motivator.”
The significance of capital growth also correlated with how investors use property to build their personal wealth as they get older. Respondents aged between 18-24 owned two properties on average, while those aged 35-44 owned on average more than two properties. Those approaching retirement aged 55-64 owned on average three.
“But once the landlord sample reached the age of 65, there was a sharp declined in property ownership as landlords divested some of their portfolio to fund retirement,’’ said Tiller.
“Property investment is most successful when a long-term vision that transcends property cycles is embraced.”
The survey also uncovered the importance of negative gearing for property investors, with 55% of respondents believing negative gearing was either ‘very important’ or ‘important’ in their investment strategies, while only 16% said it was ‘not important’.
31% of respondents said they would sell some or all of their properties if negative gearing was abolished.
“The negative gearing debate receives significant debate because of the perceived impost on the tax base,’’ said Tiller. “But it’s evident to see how important it is for investors. It is also important for the economy, encouraging investors to inject money into the economy, driving jobs and supporting local communities.”
Results showed property investment is also not restricted to the wealthy.
LJ Hooker head of property management Amy Sanderson, said owning an investment property was far more achievable than many thought, with 29% of respondents earning an annual household income of between $100,000 and $150,000 and 37% of landlords have an annual household of under $100,000.
“Across Australia and New Zealand, LJ Hooker manages more than 150,000 residential properties for landlords, which underlines the importance and accessibility of real estate as an investment option for the community,’’ said Sanderson.
As to where investors choose to invest, 63% of investors chose property at least 20km away from where they live and 14% bought interstate.
Landlords view capital growth as more important than rental returns when investing in property, according to the research, with more than one in four (27%) landlords saying capital growth was their main motivation for investing in property, while only 15% nominated rental income.
But 58% of respondents said ideally they were looking for the right balance between price growth and yield.
LJ Hooker national research manager Mathew Tiller said the findings to the real estate group’s 2015 Investor/Tenant Survey underlined the long-term vision investors took to property.
“Securing a regular income stream via rental returns is not the primary reason investors seek out property,’’ said Tiller. “The findings indicate capital growth and rental returns in combination are overwhelmingly desired, but a weekly income stream on its own is not a discernible motivator.”
The significance of capital growth also correlated with how investors use property to build their personal wealth as they get older. Respondents aged between 18-24 owned two properties on average, while those aged 35-44 owned on average more than two properties. Those approaching retirement aged 55-64 owned on average three.
“But once the landlord sample reached the age of 65, there was a sharp declined in property ownership as landlords divested some of their portfolio to fund retirement,’’ said Tiller.
“Property investment is most successful when a long-term vision that transcends property cycles is embraced.”
The survey also uncovered the importance of negative gearing for property investors, with 55% of respondents believing negative gearing was either ‘very important’ or ‘important’ in their investment strategies, while only 16% said it was ‘not important’.
31% of respondents said they would sell some or all of their properties if negative gearing was abolished.
“The negative gearing debate receives significant debate because of the perceived impost on the tax base,’’ said Tiller. “But it’s evident to see how important it is for investors. It is also important for the economy, encouraging investors to inject money into the economy, driving jobs and supporting local communities.”
Results showed property investment is also not restricted to the wealthy.
LJ Hooker head of property management Amy Sanderson, said owning an investment property was far more achievable than many thought, with 29% of respondents earning an annual household income of between $100,000 and $150,000 and 37% of landlords have an annual household of under $100,000.
“Across Australia and New Zealand, LJ Hooker manages more than 150,000 residential properties for landlords, which underlines the importance and accessibility of real estate as an investment option for the community,’’ said Sanderson.
As to where investors choose to invest, 63% of investors chose property at least 20km away from where they live and 14% bought interstate.
