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Aussies cautious about future of property in 2022

·4-min read
Couple standing in front of their new home. (Source: Getty)
Last year, 74 per cent of those surveyed correctly believed it was a good time to invest in real estate. (Source: Getty)

How have the coronavirus lockdowns affected you? Has the pandemic changed your strategy or approach to property investing?Are you considering moving to live in a different location because of COVID-19?

These are only some of the COVID-19-related questions we recently asked 1,700 Australian property investors and would-be investors in our annual Property Investment Sentiment Survey conducted by Yahoo Finance and Michael Yardney’s Property Update. Some of the answers were enlightening.

Running since 2011, our survey offers rich and vibrant insights into how property consumer trends and sentiments have changed over time.

A surprising result this year was that while only 12.4 per cent of the respondents said their household finances had worsened because of the pandemic - in other words, most Australian households noticed no real change or an improvement to their family finances - only 55.2 per cent believed now was a good time to invest in residential real estate.

However, 24.7 per cent of respondents plan to buy a new home in 2022 (up a little from 24 per cent last year and 20 per cent the year before).

This is no surprise. COVID has made us realise our homes are more than just a place to live. They’re now where we often work, work out and spend most of our days.

You can download the full survey findings but for the moment, let’s look at some of the survey highlights related to COVID-19.

Are you considering moving to live in a different location because of COVID-19?

While 82.6 per cent of the respondents were not considering living elsewhere, 6.2 per cent considered moving to Queensland, while 5 per cent thought regional Australia would offer a better lifestyle.

Do you believe now is a good time to invest in residential property?

Last year, 74 per cent of those surveyed believed it was a good time to invest in real estate, and they were right - property values increased by more than 20 per cent in many locations around Australia over the past 12 months.

Respondents to this year’s survey were less confident that now was a good time to invest in property (55.2 per cent) and that was most likely because of those significant increases in property values leaving many people wondering if it was too late to get into the market.

Auctioneer counts down a bid during an auction. (Source: Getty)
Just over half of respondents thought now was a good time to invest in residential real estate. (Source: Getty)

Other notable property trends:

  • 62.6 per cent of the respondents believed this was a good time to lock in interest rates, suggesting most felt the next move in interest rates would be up. Last year, 47 per cent of the respondents thought it was time to lock in interest rates

  • 26.7 per cent of respondents were finding the recent tighter lending criteria had impacted their ability to purchase another property. Interestingly, this was considerably lower than the past few years (2020 – 38 per cent; 2019 - 42 per cent; 2018 – 50 per cent; 2017- 48 per cent; 2016 - 46 per cent) suggesting banks’ lending criteria were easing a little.

  • Difficulty with accessing more finance was the biggest concern of these property investors

The Bottom Line

The fact that respondents to this survey already subscribed to Property Update or Yahoo Finance meant they were a captive audience of people already interested in property.

An aerial shot of a suburb in western Sydney. (Source: Getty)
Nearly a quarter of respondents owned an investment property. (Source: Getty)

When asked for their combined family income, 4 per cent earned less than $50,000 while 34 per cent earned more than $200,000. The bulk earned a combined family income between $100,000 and $200,000.

Eighty-three per cent owned at least one investment property, but a wide spectrum of investors partook in the survey:

  • 16.9 per cent owned no investments

  • 22 per cent owned one investment property

  • 18.8 per cent owned two investment properties

  • 13.2 per cent owned three investment properties

  • 4.8 per cent owned 10 or more properties

And clearly, these investors took a long-term view because while more than half the respondents planned to buy an investment property in the next year, they had realistic expectations about lower capital growth in 2022.

However, our survey shows Australian property investors focus on long-term capital growth, rather than cash flow and many are looking for a property that has the potential to add value, rather than waiting for the market to do the heavy lifting.

Investors will still face a number of hurdles due to the economic challenges facing Australia, yet few have changed their long-term plans as a result of COVID-19.

Click here to read the full survey results.

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