January 31, 2017
An overwhelming majority of Australian investors believe they made a smart decision when purchasing their investment property.
According to new data from Mortgage Choice, 94.4% of Australian landlords were happy with their property purchase.
“I'm not surprised to hear that more than 90% of Australian property investors are happy with their investment purchase,” Mortgage Choice chief executive officer John Flavell said.
“Over the years, property has proven itself to be a very lucrative and safe asset class. Recent research conducted by CoreLogic found property prices rose 10.9% across the combined capital cities over the 12 months to January.
“When you combine this impressive price growth with the fact that both vacancy rates and interest rates continue to sit at historical lows, it is little wonder why so many Australians perceive property investment as a savvy financial decision.”
Mr Flavell said while the future is hard to predict, property investors who take a long term approach to their investment strategy should always do well.
“At the end of the day, no one has a crystal ball and we cannot know what will happen in the future. That said, one thing we know for sure is that property has time and time again proven itself to be a lucrative asset.”
Mr Flavell said so long as Australian investors make well-informed decisions that are not purely based on hearsay evidence from family, friends, colleagues or strangers, then they should make a sound financial decision.
“Big financial decisions, like buying property, shouldn't be solely based on what your friends and family are telling you, they should be based on knowledge, research, and due diligence,” he said.
Behavioural economist Dr Lionel Page agreed and said Australians can be strongly influenced by what they hear and see.
“We recently undertook a field study where we asked potential investors to state how they would divide their money between shares and property,” he said.
“Some of these investors were left alone to make their own decision, while others were ‘influenced'.
“As per the results of the field study, people who were influenced reacted in a very different way to those who weren't. In other words, people are easily influenced by what they see and hear.”
Mr Flavell said the study proves why it is so important for people to make informed decisions.
“Getting advice from a professional is imperative for anyone who wants to make a better choice,” he said.
To watch the full field study video, click here.