Buyer's Agents | Property Investors | Home Buyers | Adviseable

Don’t let the “turkeys” ruin your retirement plans

The latest property investment research has shown that investors are selling many of their properties around the nation – but I don’t think they should be.

The 9th Annual PIPA Annual Investor Sentiment Survey found that about 12 per cent of investors sold one or more of their rental properties around the nation in the past 12 months.

Last year’s survey found 16.7 per cent of investors had sold at least one property in the previous two years.

PIPA estimated that hundreds of thousands of rental properties have been sold in the past three years, with the majority of these bought by existing homeowners or first-home buyers, which means a significant reduction in the number of rental properties nationwide. 

This year’s survey had some differences to the previous one because last year investors said the number one reason why they had sold in the previous two years was to make the most of positive market conditions.

Fast forward to August this year, though, and the motivations to sell are quite different, according to survey respondents. 

Indeed, respondents cited the following as major reasons for selling over the past year:

  • Governments increasing or threatening to increase taxes, duties, and levies that make property a less attractive asset to hold (47%)
  • Changing tenancy legislation (43%)
  • Talk of rental freezes (34.6%)
  • Rental increase limits or caps (27.7%)

Tellingly, these reform-related stressors were cited as selling reasons disproportionately to rising interest rates and higher loan repayment costs (40.1%), negative cash flow due to higher mortgage costs (23.2%), a need to reduce total borrowings (33.1%), or offloading an underperforming asset (18.8%).Alas, about 38% of investors said they were also thinking about selling a property in the year ahead – up from 19% who said the same thing last year. 

Some investors have had enough

It’s clear that investors are reacting to a variety of policy levers being pulled by various State Governments across the country. 

But the reality is that I don’t think they should be because successful property investment involves holding for the long-term and riding out the peaks and troughs of market conditions and changing tenancy laws.

Over the past two decades, we’ve seen negative gearing being a political punching bag before almost every Federal Election, but no changes have ever been implemented.

We’ve also had rental reforms that are often a reaction to the market conditions at the time, rather than being sound long-term policy.

Property and rental prices have also gone up, down, or flat-lined, too.

However, when we consider price growth over many years – rather than the short-term bumps and lumps – then all we see is an upward trajectory.

The most educated investors understand that the economic fundamentals of strategic property investment are sound and that is what they continually focus on.

They don’t get distracted by scaremongering media headlines or by the latest bunch of turkeys who are temporarily in power.

Rather, they know that once those politicians have been ousted and another lot takes their place, the capital growth in their property investments have been quietly increasing over the years – regardless of what political posturing might have happened at the same time. 


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