Fewer wants to buy, more wants to sell, survey finds
A decreasing proportion of property investors were thinking of purchasing another property, while more were considering selling their existing properties, according to the latest monthly Investor Insight survey by Crockers Property Management and independent economist Tony Alexander.
The report, titled Tenants much easier to find, tracked changes in pressures on rents, points of particular concern, plans regarding property purchases and intentions to sell, and shifts in preferences for property types, receiving 341 responses.
Fewer property investors were thinking about buying another property within the next 12 months, continuing a two-year downward trend. A record-low18% of investors were thinking about buying, down from 19% in June and 22% in May.
The survey also revealed a rising trend in the proportion of investors thinking about selling, up to 30% this month, from 20% in March.
“Putting the two measures together we can calculate net buying intentions, and this can give an indication as to whether price pressures are upward or downward from the people who already own residential property investments,” Alexander (pictured above) said. “A record net 13% of investors are looking to sell their properties over the coming year, down from a net 1% planning to buy in March.”
Most investors said they were planning to hold their property for the long term.
“However, and perhaps unsurprisingly, in light of the strong net selling intentions we are now observing, the proportion of investors planning to hold for 10 years at least or never sell is trending firmly downward,” Alexander said. “The proportion now sits at 51% from 55% in June and 64% in March.”
He said landlords are being pressured to leave the rental sector by a range of factors, including tax changes, rising interest rates, and rising costs such as for insurance, rates, and maintenance.
When asked what property investors will likely buy, 56% chose existing dwelling, easily exceeding the 28% looking to buy a new dwelling. Some 16% said they will develop the property themselves.
“The trend in purchasing an existing property is slowly upward versus down (again slowly) for buying new or developing,” Alexander said.
For those looking at buying new properties, 41% preferred a standalone house, 43% a townhouse, and 16% an apartment, the survey found. For those looking to buy an existing property, an overwhelming 67% of investors preferred a standalone house.
Realising assets for retirement remained the top motivation for investors planning to sell their properties soon. Retirement as a reason to sell saw a slight upward trend, while taxes affecting interest expense deductibility, too, became a more important driver to sell.
Selling to fund another property as a motivation to sell is on a downward trend and fewer are selling because they are concerned about falling prices for their asset, the latest monthly Investor Insight survey revealed.
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