Property back in favour

Thirty per cent of Australians view property as their preferred asset class, according to Elderslie Finance Corporation’s third investment opinion survey, up from 17.5 per cent six months ago.

“Until recently, the Reserve Bank of Australia had left interest rates unchanged for 14 consecutive months.

“Coupled with softening property prices and a relatively strong economy, this has stabilised property markets and boosted investor confidence in property,” director Luis Garcia said.

Listed property trusts were most popular, at 16 per cent, followed by residential property (9 per cent) and unlisted property (5 per cent).

However, the research, which canvassed the opinions of 4,500 investors and was conducted prior to the recent interest rate rise, showed that less than half of all respondents expected an increase.

Garcia said: “The effects of that rise on some investors may be harder hitting than first anticipated.”

For the highest return and capital growth on residential investments, Perth is the most favoured among capital cities, with Brisbane second.

Garcia said: “The results are particularly interesting given just 17 per cent of respondents are from Western Australia, with the majority being from News South Wales and Victoria.

“It’s clear respondents aren’t just choosing their state of origin.”

Security continues to remain the most important investment attribute, followed by capital growth, high returns and tax effectiveness.

“The recent Westpoint collapse, among others, would have reiterated the value of security and the risk of higher returns for many investors,” Garcia said.

Property investment products offering a return of over 10 per cent were viewed by the majority of investors as “high risk”.