Property is not the Only Investment Game in Town but…

Picture of someone at markt crashThe debate about how to invest your money most effectively has continued for years – Property vs Share Markets.

Right now following years of dramatic rises and falls on the Stock Markets worldwide Australians feel more confident about buying residential property and of its potential to build wealth according to the latest QBE LMI Mortgage Barometer report.

The survey of more than 1,100 home owners and prospective homebuyers recently published in ………. also found a distinct shifting in buying tastes. Over the past year a much higher percentage of first-home buyers, second homebuyers and investors are planning to buy a new house rather than an existing one.

And in line with our Act Now theme nearly one in three (32%) of those surveyed believe the next six months is the best time to buy residential property, up from 26% in 2012 while more than half believe the next 12 months is the best time to buy, up from 40% in 2012.

“This sentiment is in line with almost half of respondents (47%) thinking that property prices will increase strongly in the next three years”, says Jenny Boddington, chief executive officer of QBE LMI.

The survey also found that more people than ever believe property will be a better investment vehicle in the coming years with:

  • 17% of those surveyed classifying it as a “reliable blue-chip investment” (up from 16% in 2012);
  • 14% considering it as a way to build wealthy relatively quickly (up from 8% in 2012);
  • 22% considering it an investment to fund retirement (up from 19%)

It is also very significant that more Australians believe now that Property can stand on its own as an investment vehicle.  Compared with 12 months ago fewer respondents believe property should only be one part of a diversified portfolio (17% in 2013 versus 29% in 2012) – in other words:

“The slow recovery of the share market post-Global Financial Crisis (GFC) has likely had a large part to play in these perceptions, with dwelling values outperforming the ASX 200 Index on capital appreciation over the last decade to 2012, and proving to be far more stable (largest 12-month fall of 5% vs. 40%+ for shares),” notes the report. 

Graph of residential property

Source: Property Observer
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