As auction markets and home opens return to business as usual across most of the country, property investors and homeowners are wondering when property markets and life will get back to normal.
To better understand what “normal” looks like, a new study by MCG Quantity Surveyors outlines the changing trends in Australian property investment over the past four years. The report seeks to assist investors, homeowners and developers better understand the signs that the Australian property market is back on track and set to regain momentum.
MCG’s 1000 Assets report closely examines the ways in which investor direction and sentiment have changed between January 2016 and December 2019.
The study found a clear shift in the types of assets investors have been looking to purchase and the way in which those looking to build or renovate have pivoted in some of their investment decisions.
After analysing 5,000 investment properties, MCG found that Increasingly, investors are prepared to purchase off-the-plan properties over existing properties, with an increasing number favouring townhouses over other property types.
The report also highlights how investors are building bigger, more expensive houses while the number of units in new apartments has also increased.
With some big price jumps in Sydney and Melbourne in recent years, investors have clearly started to renovate properties more than ever. In Sydney alone, there was a +102.09% increase in the money spent on renovating a property after purchase according to the study.
Of the properties included in the report, half were renovated after purchase, with an average spend of approximately $37,500. It was also shown that 25% of homeowners chose to rent out their property after living in it on average for more than four years.
Mike Mortlock, managing director at MCG, said when these types of trends start to resume, investors will know property markets are back on track.
“Investors across the nation were tracking a defined path and a return to these trends will indicate we’re heading back to a more normal state of affairs.”
MCG’s 1000 Assets report, analysed information gathered during the preparations of 4000 tax depreciation schedules from January 2016 to December 2019.
“We broke the information into 1000-property lots by chronological order so we could both track investor trends and look at specific moments in time during the period.”
“These benchmark measures form a basis for tracking the market's progression through the crisis and out the other side.”