How do investors see the Brisbane property market in 2016? Each year we ask this question and each year we survey our extensive database of property investors and prospective buyers. We do this so Place Advisory can provide direct insights into the thoughts that the investor population have in regard to the future direction of the Brisbane property market.

So how do investors see the market today? The results from our annual investor survey have been discussed below.

Who responded?

The majority of respondents who participated in Place Advisory’s 2016 investor survey were over 45 years of age, accounting for 64% of total respondents. 69% of respondents were male, 86% had previously invested in property and the most selected income bracket was $180,000+ (30% of respondents).

What were the most significant changes?

Overall, it was made clear that the recent Federal Election and uncertainty surrounding the property market has largely impacted investor sentiment.

53% perceived the market as uncertain.

One of the most significant shifts that has been seen in the 2016 Investor Sentiment Survey is the increase in market uncertainty. Market uncertainty has grown significantly over the past two years, increasing from just 38% in 2014, to 53% in 2016.

This comes as no surprise given the uncertainty surrounding the federal election and other controversial policy changes.

50% believe the market has improved.

A major shift that has been seen this year is the number of investors who believe the Brisbane property market has improved over the past 12 months.

The 2016 survey results reveals that just 50% of respondents believe the Brisbane property market has improved.

This is 32% below the 2015 results in which 82% of total respondents believed the Brisbane market had improved.

43% preferred investment in Middle Brisbane.

In previous years, Inner Brisbane (within 5km) has been the most popular precinct for investment. However, the Investor Sentiment Survey for 2016 reveals that Inner Brisbane is no longer the most popular location, instead Middle Brisbane (5km-10km) is now the preferred investment location (43%).

With continuous unfounded media speculation that the Inner Brisbane market is oversupplied, it is no surprise that investors are beginning to search for investments outside of the Inner Ring.

The survey results also indicate that the majority of respondents are looking to purchase property in the next 12 months (29%) to two years (27%). Investors looking to purchase within the next six months has decreased from 25% in 2015 to just 18% in 2016 as a result of market uncertainty and lack of improvement in the market.

Preferred Dwelling Type

Up until the 2016 annual investor survey, there was a clear shift towards apartments for the preferred dwelling type. In 2015, 35% of investors stated their preferred dwelling type was an apartment. However, this year’s investor survey reveals that this has decreased to just 27%, with the majority of investors (48%) preferring to purchase a detached house.

The results also indicated that investors have a preference toward larger two and three bedroom dwellings as opposed to smaller one bedroom dwellings. This indicates that the demand for higher quality apartments is increasing and is expected to be centred around this product in the medium term.

Expected Growth

Although the survey results have shown increased market uncertainty and lower perceived improvement rates in the market, investors are still optimistic in regards to capital growth that they expect to achieve. As shown below, the majority of respondents (36%) expect to achieve between 4% and 6% capital growth. Surprisingly, 31% of respondents stated they expect to achieve above 8% growth on their investment.

Preferred Purchasing Drivers

Proximity to the CBD and employment opportunities were once the most important purchasing drivers for investors, however the results for 2016 reveal that public transport and access to retail and entertainment precincts are now the top picks.

Savvy investors are seeing opportunities to invest in suburbs that are located further from the CBD and employment opportunities but closer to public transport services and retail precincts. The affordability and lifestyle factors, along with the willingness to travel further to work are making these suburbs a popular choice for renters.

Overall, the Brisbane property market has seen rapid change throughout 2016 after a very strong 2015. With the relentless media attention, the recent Federal Election and other controversial policy changes, the property market has been in the spotlight, which has resulted in contracted sales rates and slower buyer decisions.

Place Advisory expects that the uncertainty experienced by investors throughout 2016 will slowly subside now that the Federal Election has concluded; returning a level of stability to the market.

See also:

Brisbane apartment market at more sustainable levels

Coronas opens its 22nd Brisbane office