Our new Property Sentiment Report has revealed the two markets that have caught the eye of Australian property investors in 2022.
Momentum Wealth has once again completed our annual Property Sentiment Survey, which this year canvassed the views of over 700 Australians to reveal their investment plans and preferred purchase locations.
So, what were some of the biggest takeaways?
Property remains an incredibly popular asset class
Over the past year, investor activity has been nothing short of exceptional. The Australian Bureau of Statistics reported a 48% jump in lending to property investors in the 12 months to March 2022.
Our survey results suggest this intense activity could be with us for some time.
One in four (25%) of our survey respondents were ‘active’ investors, planning to buy an investment property over the next 12 months.
This was followed by a further 14% of participants who planned to continue saving to acquire more properties, and 10% who intend to develop a property in the next two years.
Two cities top the preference list
Among active investors, two cities emerged as leading investment locations – Perth and Brisbane.
Two out of five investors planning to buy in the year ahead nominated the WA capital as their preferred market.
Brisbane ranked in second place, selected by one in three active investors.
Meanwhile, investor confidence had experienced a decline in Sydney and Melbourne, cited as the preferred destinations by just 11% and 7% of active investors respectively.
Affordability a key driver of investor activity
Of the active investors favouring Perth and Brisbane, there was one common factor driving their decision.
Over 40% of respondents who nominated Perth pointed to the market’s value as the chief drawcard, while 35% said the same of Brisbane.
Damian Collins, our Founder and Managing Director at Momentum Wealth, agrees that Perth in particular offers investors plenty of value for money.
“The latest data from CoreLogic shows that at the start of May, the median property value was $552,128. That’s less than half Sydney’s median value of $1.12 million and considerably below Melbourne’s median of $806,144. It’s also a lot more affordable than Brisbane where the median value is $770,808.”
Perth values climb, other cities cool
Along with affordability, Perth is also set to enjoy strong capital growth.
REIWA forecasts show Perth values are expected to rise 10% in 2022. This is driven in part by a domestic economy that grew 4.3% in 2020-21 – the strongest across all Australian states for the second consecutive year.
This growth is forecast to continue, with the WA state government’s mid-year review in December 2021 projecting the economy to grow a further 3.5% in 2021-22.
“Property price growth of 10% for Perth in 2022 is not unreasonable,” says Damian. “This would represent the market returning to values appropriate for a city of Perth’s size and economic scale.”
Already, we’ve seen Perth notch up gains of 1.1% in April 2022 alone, while Sydney and Hobart values dipped 0.2% and 0.3% respectively, and Melbourne’s market flatlined with zero growth for the month (CoreLogic).
Damian adds, “the return of interstate and overseas migration into Perth will underpin a significant uptick in demand for housing, so there is still plenty of upside for investors who get into the market early.”
Download the full report
Want to know more of the findings from our Property Sentiment Report? Download your free copy below for exclusive insights into investor behaviour in 2022: