Australian Property News

Confidence in property remains high

Posted on Tuesday, September 28 2010 at 9:52 AM

Confidence in property as a secure long-term investment has held up over the past year, according to Momentum Wealth’s 2010 National Property Investors Survey.

More than 450 investors responded to the survey, with the results showing that confidence fell by only half a per cent to 98.6 per cent from the year prior.

That’s despite the continuous effects of the global financial crisis (GFC) in the 12 months since the last survey, according to Momentum Wealth managing director Damian Collins.

“If anything, the GFC has solidified in many people’s minds in Australia the benefits of investing in quality property,” he says.

“While the sharemarket dropped almost 60 per cent, in Australia property prices declined only around 10 per cent or less and all major cities have recovered to exceed the pre-GFC prices.”

More than 80 per cent of survey respondents believe there’ll be growth in the property market over the next year and less than eight per cent are concerned that there’ll be a decline.

Collins notes that price growth is likely to vary across Australian cities.

“We still have a shortage of property in Australia and if we continue to have a strong economy and high rates of immigration, property will continue to perform well,” he says.

“I expect the cities that had solid growth in the last 18 months – Melbourne and Sydney – to enter a period of stable to low growth through 2011 but I expect Perth and Brisbane to perform the best in 2011.

“There is certainly some catch up growth in these two cities over the next two years.”

Collins stresses that investors need to have reasonable expectations and notes that a well-selected property in the right city should grow at eight per cent per year on average.

More than 70 per cent of Momentum Wealth’s survey respondents believe now is a great time to buy, with plenty of opportunities in the current market.

Just over 50 per cent said they were actively planning to purchase an investment property within the next year.