With house prices going gangbusters in the first half of 2021, is it still a good time to buy property? The majority of investors think so, according to the latest annual survey. And investors have their sights set on one city in particular.

The 2021 PIPA Property Investor Sentiment Survey, which gathered insights from 800 property investors across the country in August, found more than 76% of investors believed property prices in their state or territory would increase over the next 12 months.

That’s up strongly from 41% this time last year, when COVID-19 had some investors a touch nervous.

“When we think back to last year, which was a time of much fear and uncertainty, it’s clear that property investors and the market, in general, has weathered that turbulent period better than anyone dared to hope,” said PIPA Chairman Peter Koulizos.

Here are the top five trends the PIPA survey identified.

1. Most investors believe it’s a good time to invest

This year’s survey found that nearly 62% of investors believe that now is a good time to invest in residential property, which is a tad down from 67% in 2020.

PIPA says that dip in confidence may be due to the high property price growth this year as well as significant lockdowns taking place at the time of the survey.

2. The sunshine state looks to be the property hotspot

This year’s survey produced the biggest ever margin when it came to the location investors believe offers the best potential over the next year.

“A staggering 58% believe the sunshine state [Queensland] offers the best property investment prospects over the next year – up from 36% last year,” Mr Koulizos says.

New South Wales came a distant second at 16% (down from 21%), and Victoria was third at 10% (significantly down from 27%).

Brisbane also beat its capital city counterparts, with 54% of investors believing it has the rosiest outlook.

Mr Koulizos says the boost could be to do with Brisbane being named host of the 2032 Olympic Games, and significant upcoming infrastructure spending.

“All of these factors, as well as the affordability of property in southeast Queensland and strong interstate migration, are some of the reasons why investors are so optimistic about market conditions there,” he adds.

3. Regional and coastal markets continue to grow in demand

While investors still believe metropolitan markets offer the best investment prospects at nearly 50% (down from 61% in 2020), regional and coastal markets are closing the gap.

A quarter of property investors now favour regional markets (up from 22%), while 21% of survey respondents have their eye on coastal areas (up strongly from 12% last year).

4. Fewer investors looking to sell

The lingering impacts of the global health emergency – as well as robust price growth over the past year no doubt – mean fewer investors (59%) are looking to sell a property this year compared to last year (71%).

“Part of the reason for the uplift in property prices over the past year has been the continued low levels of supply in most locations around the nation,” Mr Koulizos notes.

“With a decrease in the number of investors indicating they intend to sell over the short-term, it seems unlikely that this boom market cycle is going to change anytime soon.”

5. Almost three-quarters of property investors use a mortgage broker

Just 17% of respondents secured their last investment loan directly via a bank, while 4% used a non-bank lender.

The vast majority (72%) of respondents secured their loan through a broker, a slight increase on last year’s figure of 71%.

And 72% of respondents said they’d use a broker to finance their next investment loan.

It just goes to show that it doesn’t matter how far you are on your property journey – whether you’re a first home buyer, refinancer or savvy property investor – we can help you every step of the way.

So if you’re looking to add to your property portfolio, looking for a change of scene, or keen to crack into the market, get in touch today.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

While most Australians dream of owning their own home, the majority of hopeful homeowners admit they don’t fully understand how home loans or mortgage rates work. That’s why we make it our mission to enlighten you during your home buying journey.

They say knowledge is power.

But this week we stumbled across some interesting stats from UBank’s Know Your Numbers survey.

It found that 84% of Australians who are yet to buy a property admit they don’t know enough about how home loans, mortgage rates and deposits work, while 3 in 10 admitted to knowing nothing at all and having no idea where to start.

But if you start by jumping at the first seemingly attractive rate you see advertised, well, that can lead to big problems down the track.

“Entering the property market with little to no knowledge of some essential financial terms and concepts could see Australians falling into common traps or getting themselves into situations they cannot manage,” explains UBank CEO, Philippa Watson.

How we help demystify finance for you

Now, the purpose of this article isn’t to shame anyone who hasn’t already done their homework. Far from it.

Rather, we want to reassure you that when you come to us for a finance solution, we’ll be sure to explain any financial terms or products you don’t fully have your head around yet.

And that’s one of the key differences between us and the big banks.

We’re not just satisfied with matching you up with a home loan, we want you to be confident that it’s the right one for you, and for you to understand the reasons why.

Some of the most common financial terms we explain to our clients

There’s no denying the world of finance is full of jargon and seemingly complicated language.

To help get you started, below are some of the most common financial terms people ask us about.

Loan to Value Ratio (LVR): LVR is the percentage of the property’s value (as assessed by the lender) that your loan equates to.

For example, if the property you want to purchase is valued at $500,000, and you need to borrow $400,000 to pay for it, the loan is worth 80% of the property value, making your LVR 80%.

Lenders Mortgage Insurance (LMI): LMI is insurance that protects the bank or lender in case you can’t pay your residential mortgage.

It’s usually paid by borrowers who have an LVR higher than 80% – that is, borrowers with a deposit of less than 20%.

Offset account: an offset account is just like a regular transaction account, except it’s linked to your home loan. The money held in the account is counted as if it’s been paid off your home loan, which reduces the balance of the loan and in turn, reduces the interest you need to pay.

And because the offset account acts like a regular transaction account, the money you’ve put in there is still accessible whenever you need it.

Refinancing: refinancing is the process of switching your home loan to take advantage of another, more suitable home loan for your present circumstances, such as one with a lower interest rate that might save you money.

Got any other finance terms you’d like explained?

If you’re keen to buy your first home but find all the terminology a bit daunting, then please reach out to us today.

We’re always happy to sit down and demystify the home buying process, so that when you do take the leap into ownership, you can be confident that you’re armed with all the knowledge you need.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.