The 2017 Investor Sentiment Results

Place Advisory’s Annual Investor Sentiment Survey for 2017 recently closed. The results have been collated and key themes have been highlighted.

The Investor Sentiment Survey assessed the real level of consumer confidence in the market place today, whilst also gaining accurate feedback as to what is driving active purchasers. This is timely given the recent slowdown in Inner Brisbane’s apartment market.

The results from this survey provide direct insights into the thoughts that the investor population have in regard to the current and future direction of the Brisbane property market. A number of key assertions were consistent throughout the survey and became readily apparent due to strong participation and detailed comments left by respondents.

Perceptions of the Brisbane Market

Over the past five years, the Brisbane market has seen a full property cycle occur, with the most recent 12 months being a period of uncertainty. The Place Advisory 2017 Investor Sentiment survey found that 51% of respondents believe the property market has suffered the past 12 months, an increase from 42% recorded 12 months prior. This is a substantial increase when looking back to 2013, when 71% of respondents believed the market was improving. Undoubtedly, investor sentiment has changed significantly over the past few years in Brisbane and consumer confidence for new apartments in large buildings has been hit the hardest. Interestingly however, over the past five years, and in particular the past 12 months, we have seen an increased demand for Terrace Homes, with 24% of respondents in 2017 stating that this is their preferred dwelling type, an increase of 9% from 2016.

Expected Capital Growth

Despite high market uncertainty, some investors are ambitious in regards to capital growth that they expect to achieve. Whilst the majority of investors (45%) expect to achieve between 4% and 6% capital growth, 28% expect to achieve above 8% growth on their investment.

Purchasing in the Next…

With the increasing level of uncertainty in the market place today, it is no surprise that the majority of survey respondents are looking to purchase in the next two years.

Preferred Bedroom Breakdown

Investors have a strong preference toward larger three bedroom dwellings as opposed to smaller one and two bedroom properties. Over the past 12 months, the preference for three bedroom properties has increased from 39% to 48%.

Purchasing Drivers

Preferred purchasing drivers have remained relatively similar when compared to the previous 12 months. In previous years, demand was driven by proximity to the CBD and employment opportunities. However, over the past two years, investors are seeing opportunities to buy in suburbs that are located further from the CBD and closer to public transport services and retail and entertainment precincts.

Overall, the Brisbane property market has continued to be uncertain and difficult to navigate for investors. With apartment development peaking this year, 2017, a perceived oversupply is still weakening the property market, which has resulted in a reduction in new apartment sales.

With a looming apartment development slowdown, Place Advisory expects that market conditions will improve in the medium term as new supply is absorbed.