The recent uptick in investor activity is not just a fleeting trend. As Australians focus more and more on building a comfortable retirement, investor activity will continue to grow and brokers should be doing their best to target this market segment.
New data from the Australian Bureau of Statistics shows loans for investors reached a mammoth $11 billion in April this year.
Certainly low interest rates, good yields and impressive returns compared to other assets are adding to property’s appeal at the moment. But it’s not just market fundamentals driving this trend. This is a much bigger trend at play than that. Australians are growing increasingly concerned with creating a comfortable retirement and they are recognising the wealth-building benefits that property investment presents. And this isn’t just my belief. More and more research is pointing to this.
For example, a recent report by Roy Morgan Research highlighted the growing spread of property investment, revealing growth in the number of Australian property investors of 37 per cent in just four years.
According to Roy Morgan, in 2010 there were 954,000 Australians with an investment property loan. This compared to an estimated 1.31 million in March 2014.
Interestingly, over the same time frame, the number of loans for owner-occupied activity rose just 4 per cent.
And who are these property investors? According to Roy Morgan, the vast majority are between 35 and 64 years of age, with the biggest increase in investment occurring among 35- to 49-year-olds.
As Australia’s population continues to age, preparing for a comfortable retirement is becoming higher and higher on the nation’s agenda.
You only need to look to the increasing frequency of superannuation advertisements on the television or within the pages of magazines and newspapers. Australia is getting older and suddenly increasingly preoccupied with crafting a comfortable financial future.
The MLC/Investment Trends Retirement Income Report released in June showed that concerns over a shortfall in retirement income has prompted half of Australians over 40 to seek out investment information in the past 12 months, an increase of over 40 per cent from the same time last year.
The report also found that 78 per cent of respondents planned to seek further information relating to their retirement in the year ahead – compared to 64 per cent one year earlier.
Without doubt, brokers are well-positioned to benefit from this growing focus on wealth creation and those brokers savvy enough to position their businesses accordingly stand well placed to build wealth themselves.
Ask yourself this: what are you doing to target property investors? Are you having discussions with your clients about building wealth for retirement?
And in particular, what are you doing to bolster your investor offering? Certainly, the addition of property investment advice to your service offering could be a valuable investment.
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