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The ‘comfort factor’ is a primary reason for Australians investing in property rather than shares, according to a recent survey by non-bank lender Homeloans.
“We asked ... why people have invested in property, and nearly 50 per cent of respondents who have invested admitted they feel more comfortable investing in property than shares,” said Will Keall, executive head of marketing with non-bank lender Homeloans.
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Capital growth potential and rental returns were also reported to be high on the list of considerations for investors.
“When it comes to the location of a property, over two thirds consider rental demand,” said Mr Keall.
“That can be a good strategy because these properties will also generally be attractive to other investors and even owner occupiers should you ever decide to sell.”
The survey indicated that property close to local amenities and transport – therefore appealing to a wider range of tenants – is most attractive to investors.
Additionally, nearly one third of survey respondents are planning on buying an investment property in the next 12 months, and more than 34 per cent of those will be first time investment property purchasers.
“A combination of low rates, the housing market showing signs of life in various cities, and the stock market’s volatility means people are being attracted to buying residential property as an investment,” Mr Keall said.
Unlike owner occupiers, who on average move home once every seven years, property investors are more likely to hold onto their first investment property for around 12 years, according to Mr Keall.
“Residential real estate is generally a good medium to long-term investment and is often seen as less volatile than shares,” he said.
“A good residential investment property can provide an income-producing asset with a long-term rental income stream, plus it can represent solid wealth creation through capital growth and, down the track, collateral security for further investment,” he said.
