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Investor attention turns West in 2021

Wednesday, 31st Mar 2021
Categories: Uncategorized

In early 2021, Momentum Wealth asked over 460 property investors which city they believe is the best location to purchase an investment property.

Here’s what they said.

Perth seen as the market with the greatest upside

Property investors from across Australia are turning their attention to Perth, believing it to be the best capital city market in which to buy property in the next 12-months. 48% of respondents to our Annual Property Investor Sentiment Survey were confident that the Perth market is offering the best opportunities, an increase in 11% from our previous survey. Unsurprisingly, home sentiment is also strong in Perth with 78% of Western Australian investors selecting their home market as their preferred location to invest across the next 12-months.

What’s behind this?

The Perth market recorded its seventh consecutive month of growth in March 2021, helping to boost investor confidence alongside a number of other factors. Western Australia has witnessed strong demand from owner-occupiers and first-home buyers, both of which are placing increased pressure on sales and rental stock – which were already low – leading to positive price movement across the board. Increased activity in Perth’s mining sector and effective handling of the COVID-19 pandemic has also helped stimulate and buoy the economy, leading to heightened investor confidence.

Home sentiment is strong in Brisbane

Queenslanders remain confident in the Brisbane property market with 76% of local investors viewing it as their preferred investment location. This confidence also extends outside of Queensland as 24% of all people surveyed believed it to be the best place to invest.

What’s behind this?

Sharing similar characteristics to Perth, the Brisbane market has been stimulated by an increasing level of interstate population growth that is helping to place pressure on sales and rental stock. Experts are also forecasting strong growth for the Brisbane market, another factor helping to lift sentiment in the sunshine state.

Investor confidence in Sydney and Melbourne falls

Confidence amongst investors towards Melbourne has fallen by 7% compared with our previous survey, with only 10% of investors viewing the city as the best location to invest in 2021.

Investor confidence in the Sydney property market also remained low with only 8% of investors viewing it as the capital city market with the greatest potential.

What’s behind this?

Sydney and Melbourne’s property markets have both benefitted from high levels of overseas migration in recent years. While this has been a positive for a number of years, the closure of international borders has led to a softening of the market, particularly the inner-city market.

Despite the weakened inner-city markets, owner-occupier activity has helped Sydney and Melbourne weather the impact of the pandemic better than many experts first predicted. However, investors remain largely absent from these two markets as they turn attention to cities like Perth and Brisbane which are offering much tighter rental markets as well as greater affordability.

 

Download our free 2021 Investor Sentiment Survey – Key Findings Report to uncover more insights about how recent shifts in the property investment landscape have impacted investor confidence and intent.