A large proportion of Western Australians planning to buy an investment property are delaying their purchase until the federal government's first home owners boost expires, a new survey shows.
A large proportion of Western Australians planning to buy an investment property are delaying their purchase until the federal government's first home owners boost expires, a new survey shows.
The announcement is below:
Australia's largest independently-owned mortgage broker, Mortgage Choice has discovered that almost three quarters of Western Australian residents planning to buy an investment property in the next two years are waiting until the First Home Owner Boost (FHOB) expires.
72% of the WA respondents to the 2009 Property Investors Survey said they were delaying their upcoming investment property purchase until the FHOB finishes on 31 December 2009. Interestingly, before the extension was announced, only 33% were delaying their purchase until the initial completion date of 30 June 2009 had been reached.
Mortgage Choice senior corporate affairs manager, Kristy Sheppard said the survey highlights an observation made recently by many of the company's franchisees.
"We have been hearing from a number of corners that property investors are all set and ready to go once the Boost has had its day. This appears to be the case in the Western Australia as well. Competition from first homebuyers has been so intense since late last year that most investors seem to have stepped back for the moment. A large number are calling our loan consultants to see how much money they can borrow from the various lenders on our panel and getting their finances in order, all in preparation for hitting the ground running to purchase in 2010 and 2011," she said.
42% of the WA respondents, all of whom are purchasing an investment property in the next two years, were Generation X*, 33% were Baby Boomers, 25% were Generation Y and 1% were Builders. WA had more Baby Boomer respondents than the national average of 28%. 28 years of age was the most popular age upon purchase for Gen Y, at 21%.
One in three rated their level of confidence in their housing market as 'high' (31%) to 'very high' (3%). 61% rated it 'moderate', while 4% rated it 'low' and a further 1% 'very low'.
Queensland respondents were the most confident in their housing market, with 40% saying high to very high, followed by Victoria at 37%, South Australia at 36%, New South Wales at 35% and then WA (34%).
According to WA respondents, the areas around Australia that provide the best investment prospects over the coming two years were:
1. 38% - Within 15km of Perth metropolitan area
2. 30% - Within 15-50km of Perth metropolitan area
3. 10% - Within 15km of Melbourne metropolitan area
4. 3% - Outside 51km of Perth metropolitan area
5. 3% - Outside 51km of Brisbane metropolitan area
6. 3% - Within 15-50km of Melbourne metropolitan area
7. 3% - Within 15-50km of Darwin metropolitan area
8. 2% - Within 15-50km of Brisbane metropolitan area
9. 2% - Within 15km of Adelaide metropolitan area
10. 2% - Within 15-50km of Adelaide metropolitan area
WA respondents were more likely to be considering purchasing a house (73%) than the national average (66%) and less likely to be considering a unit/apartment (42% comparing to 53% nationally). 35% said they were looking to buy a townhouse/terrace, 9% a commercial property and 7% a duplex.
Almost three quarters saw property investment as a better bet than investing in shares. The top ten key motivators behind these respondents planning to buy an investment property were:
1. 95% - I want to set myself up financially for the future
2. 79% - Currently-low interest rates
3. 77% - Potential for housing price rises
4. 77% - Tax benefits
5. 76% - The benefits of the current property market
6. 74% - I see more benefit in investing in property than I do in the share market
7. 68% - I've researched the property market and feel property investment will enable me to achieve my financial goals sooner/better
8. 60% - Reading and/or hearing of others' success
9. 53% - Capital gain
10. 52% - Negative gearing
"It is great to see many of these upcoming investment property purchasers have lofty ambitions as market players. 19% of Western Australian respondents said they plan to create an investment property portfolio of 'as many properties as possible', 50% were looking to own two to three properties, 16% wanted only one, 11% were planning on four to five and 2% were planning on six to 20," Ms Sheppard said.
30% will purchase the investment property on their own while 66% will buy with a partner. 2% will purchase with a parent, 1% with a friend and a further 1% with a property syndicate.
Most buyers were looking a fair way into the future when it came to holding onto the property. 44% said they were intending to keep it five to 10 years, 43% were planning on keeping it for 10 years or more, while 13% said up to five years.