Property investors are getting younger

After reviewing new data from the 2016 Mortgage Choice Investor Survey, we have found that property investors are getting younger.

The 2016 Investor Survey demonstrated that 50.8% of investors were 34 years of age or younger when they purchased their first investment property, a huge 17% increase from the results of the 2013 survey.

Mortgage Choice Principal Loan Consultant Adam Broughton said he was surprised to see an increase in the number of younger property investors.

“With property price growth outpacing wage growth over the last few years, saving a deposit and buying property has become very difficult for a lot of younger Australians,” he said.

“Furthermore, the recent spate of investment lending changes has made it tougher – in some instances – for younger Australians to obtain finance to buy property.”

Adam said it was clear from the data that Australians clearly understood the value of owning property and younger Australians were keen to get their foot into the market sooner rather than later.

“Property prices have risen significantly across most markets over the past few years, which is great news for property owners,” he said.

“Data from CoreLogic shows property values have risen by 10.0% across the combined capital cities over the last 12 months to June.

“This level of price growth ensures property owners – specifically those with investment property – see great returns on their investments should they wish to sell.

“In fact, looking at the survey data, the number one reason why Australians bought an investment property was for financial gain.”

According to the data, 29.6% of respondents said they bought an investment property to ‘set themselves up financially for the future’.

“Australians understand the benefit of investing their money in property. Provided they take a long term approach to property investment, investors should be able to see a good return on their investment,” Adam said.

“And, with interest rates currently sitting at historical lows, the cost of borrowing is more affordable than ever. There has never been a better time to be a property investor.”

Of course, for those Australians thinking of buying an investment property in the not-too-distant future, Adam said it is important for investors to do their due diligence.

“Before buying an investment property, it is important to do your research and get a good understanding of the current property market. In your research, look for suburbs that perform better than others in terms of rental yields and capital growth.”

If you would like learn more about your home loan or financial advice options, call 02 9358 4855, or email Adam at adam.broughton@mortgagechoice.com.au

 

Table 1: Investor age

How old were you when you purchased your first investment property?

National

NSW

VIC

QLD

SA

WA

18 – 24

11.3%

16.1%

9.1%

8.8%

10.3%

11.4%

25 – 34

39.5%

43.1%

37.9%

41.7%

36.9%

39.1%

35 – 44

26.6%

23.2%

28.8%

23.0%

28.6%

29.7%

45 - 54

13.9%

8.5%

13.7%

20.6%

13.8%

12.9%

55 - 64

5.8%

5.3%

6.4%

5.4%

6.5%

4.4%

65 +

2.9%

3.8%

4.1%

0.5%

3.9%

2.5%

 

Table 2: Purchasing motivation

What were the key motivators behind your property purchase?

National

NSW

VIC

QLD

SA

WA

My parents success with property investment

4.8%

4.3%

4.1%

2.5%

5.9%

7.5%

I see value in owning an investment property

1.0%

1.9%

1.4%

0.0%

1.5%

0.5%

I’m not ready to buy a home, but want to get a foot on the property ladder

5.8%

8.1%

3.6%

7.3%

4.0%

4.0%

I see more benefit in property investment that other assets

9.6%

13.3%

9.6%

7.8%

7.4%

9.9%

Property investment helps me achieve my financial goals sooner

5.5%

3.8%

6.4%

10.3%

4.4%

1.5%

Tax benefits

4.5%

4.3%

5.9%

5.9%

4.1%

4.0%

Advice received from parents and/or adviser

2.3%

1.9%

1.8%

1.0%

3.4%

3.5%

Capital gain

3.9%

2.4%

3.2%

5.4%

3.4%

5.4%

Negative gearing benefits

4.4%

4.7%

2.3%

4.9%

4.4%

5.9%

Positive gearing benefits

1.5%

2.4%

1.4%

1.5%

1.0%

1.5%

I want to set myself up financially for the future

29.6%

24.6%

31.5%

27.0%

34.5%

29.7%

Pressure from my family/partner

1.8%

2.8%

1.8%

1.0%

0.5%

2.5%

Building a portfolio to hand onto beneficiaries

4.3%

3.3%

6.4%

6.4%

3.4%

2.0%

Rental yield benefits

3.6%

4.3%

3.7%

2.5%

3.4%

4.5%

Create a diversified asset portfolio

4.2%

3.8%

4.6%

3.9%

4.9%

4.5%

To plan for my retirement

13.2%

14.1%

12.3%

12.6%

13.8%

13.1%

 

For further information or to arrange an interview, please contact:

Adam Broughton

Mortgage Choice Woolloomooloo, servicing Sydney’s Eastern Suburbs

02 9358 4855

adam.broughton@mortgagechoice.com.au

 

 

 

*About the survey

Market research company TEG Rewards was commissioned by Mortgage Choice to conduct the 2016 Investor Survey. The online survey was conducted in May 2016 and completed by 1,062 Australians who were planning to purchase their first investment property in the next two years or recently purchased their first investment property.

 

Important information

This article is for general information purposes only. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the advice, consider its appropriateness to your circumstances.

 

About Mortgage Choice

Mortgage Choice is an ASX listed company that seeks to help Australians with all of their financial needs.

Established in 1992, Mortgage Choice was originally established to help Australians improve their financial situation by offering a choice of home loan providers, coupled with the expert advice of a mortgage professional.

Since that time, the company has grown and developed into a fully fledged financial services provider.

Today, Mortgage Choice helps customers source car loans, personal loans, credit cards, commercial loans, asset finance, deposit bonds, and risk and general insurance.

Further, the company offers Australians access to real, relevant and affordable financial advice through our qualified financial advisers.

Mortgage Choice has no balance sheet or funding risk, and consistently delivers strong profits and attractive yields. It listed on the ASX in 2004 (MOC) and is a member of the Mortgage & Finance Association of Australia (MFAA).

Mortgage Choice holds an Australian Credit Licence: no. 382869 and Mortgage Choice Financial Planning Pty Limited holds an Australian Financial Services Licence: no. 422854. Both licences are issued by ASIC.

Recent recognition: 2015, 2014 Australian Broking Awards Best Diversification Program; 2013, 2012, 2011 Australian Broking Awards Major Brokerage of the Year – Franchise; 2013, 2012 Australian Broking Awards Best Ethical/Social Responsibility Program; 2012 Australian Broking Awards Best Training and Education;   No.1 on The Adviser magazine’s 2012, 2011, 2010 and 2009 Top 25 Brokerages list; 2012, 2010, 2009, 2008, 2006 and 2005 MFAA Awards Retail Aggregator/Originator of the Year; 2011, 2010, 2009 and 2008 10 Thousand FEET Top 10 Franchise list; 2010 Forbes Asia-Pacific Best Under A Billion list.

Visit www.mortgagechoice.com.au or call customer service on 13 6678.

 
Posted in: Property Investment

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