The Australian property market has been soaring and continues to represent a safe, effective and attractive investment option to property moguls and ordinary people alike, finds a recent Nielsen Property Research Survey*. Furthermore, while rapidly rising property values are pricing first home buyers out of the inner-city market, enthusiasm for property investment as a whole hasn’t dwindled; instead, it’s just evolving into something slightly different. To stay ahead of the game, real estate agents need to understand the shift in sentiment and adapt to fully capitalise on this trend.
20% of Aussies are on board the investment property bandwagon
Testament to the enduring popularity of property as a safe, high-performing investment is the statistic that one in five Australians are currently active property investors. Not only that, 40% of these investors are looking to invest in additional properties within the next three years. Naturally, they will be leveraging their existing equity to expand their holdings in the future.
A promising outlook, but how can agents capitalise on this knowledge? “These statistics highlight the importance of not just being the selling agent, but becoming a trusted advisor,” advises Domain’s Corporate Sales Manager and Spokesperson Stuart Benson.
“If you’ve assisted in securing one building block in someone’s financial future, there’s every chance that through advice, trust and rapport, you’ll be in a great position to re-engage with that same investor when it comes time for them to look at adding another property to their portfolio,” he says.
The rise of the young investors
Gen-Y (aka millennials or anyone between the ages of 18 and 35) is now the largest population age group in Australia, and they’ve long since invalidated all the smarmy scepticism that made for good “get off my lawn” reading a few years back. The younger generation is serious and financially savvy, with 17% of them owning multiple investment properties, a rate that’s on par with Baby Boomers.
In addition, gen-Y’s capacity to rapidly absorb information has seen to it that 30 is the new 45 when it comes to buying a first investment property. Increasingly it’s happening before starting a family or finding the ideal property in which to house them. 26% of Gen-Ys are still living at home, and among this wily bunch a huge 87% intend to purchase an investment property within the next three years!
“One of the interesting things about the increase of Gen-Y investors is that they’re not necessarily looking for a place to one day call home — they simply want to get a property in the market as soon as possible,” explains Stuart. To capitalise on this market, agents need to understand what the younger generation wants and how best to engage with them in a valuable and tech-savvy way.
Property is still a popular investment choice
Despite media rumblings that the property market might be on shaky ground, the Neilsen survey revealed that the average Australian bears no such gloomy outlook. Persistently soaring property prices seem to have people convinced, with 65% of Australians feeling certain that property is still a good investment.
While the level of agreement fell to about half for those currently invested, optimism remains high among those seeking to enter the market — almost half of those investing in the next three years will be new to the game.
It shouldn’t be all that surprising says Stuart. “Australians always have, and always will have, an intrinsic relationship with the great Australian dream of property ownership. Most of us have witnessed other generations accumulate wealth, or at least security, through bricks and mortar assets. Over time, even the worst investment will make a dollar”.
For agents willing to adapt to the needs of these investors, Stuart is convinced it represents an excellent opening. “Because new investors are constantly entering the market there’s an opportunity to become a key influencer in this space. Initiatives such as hosting free investor nights — where you explain the processes, have home loan experts attend to talk about various lending options, and a conveyancer to go through the legalities — can create a great deal of synergy between you and these potential investors”.
Spirits remain high, so make the most of it!
It’s clear that even though the property market is definitely evolving and adapting in response to the social and economic changes going on, Australians remain highly interested. The great Australian dream might be changing into something a little more practical, but activity in the property market doesn’t appear to be slowing.
A house is still a house — a highly desirable and appreciable asset — and that’s unlikely to change any time soon. That’s great news for agents, who’ll remain at the centre of the buzz. If they can adapt and work with these trends, they’ll be indispensable.
* Nielsen research, September 2014.
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