Most property investors prefer old over new
Property investors prefer established houses over new developments, a survey has found.
Property investors prefer established houses over new developments, a survey has found.Mortgage Choice’s annual Investor Survey has found 76.7% of Australian investors purchased an established property rather than a newly built one. The company’s chief executive John Flavell said this figure was up from 75.8% in 2015.
“Despite the fact that there is an increasing number of new properties – including new apartment blocks – coming onto the property market, it would seem as though the majority of investors feel as though an established dwelling would best suit their needs,” Flavell said.
The survey also found the majority of investors wanted to buy a larger property to attract a wide range of tenants, with 71% of investors saying their investment property had at least two bedrooms.
“Investors understand that the better their premise is in terms of size and access to important amenities, the more likely they will be to attract and retain good quality tenants,” Flavell said.
Flavell used the survey results to argue against Labor’s proposed changes to negative gearing, which would restrict the tax concession to newly constructed dwellings.
“At Mortgage Choice, we believe negative gearing plays an important role in the property market. The tax benefits associated with negative gearing helps to make property investment more attractive to some Australians. And, given that the success and strength of the housing market is critical to the ongoing health of the Australian economy, it doesn’t make sense to consider removing any initiatives that help this market,” he said.
Instead, Flavell argued policymakers should focus on initiatives to help first home buyers.
“Looking at our latest data, more than one third of property investors were first time buyers. In other words, one in three property investors decided to buy an investment property before an owner occupied home,” Flavell said.
“Looking ahead, with property prices rising fairly steadily across the capital cities, I wouldn’t be surprised to see an increasing number of first time buyers purchasing investment properties before an owner occupied dwelling.”
