Property investing on the rise?

The majority of Australian investors are planning to increase their overseas property exposure, with the knock-on effect of the sub-prime crisis improving the attractiveness of some offshore markets, according to the latest Jones Lang LaSalle Survey of Investor Sentiment.

The survey showed that 79 per cent of investors intend to increase their exposure to direct overseas property and 62 per cent to indirect overseas property.

Jones Lang LaSalle national head of investments John Talbot said that of those surveyed, not one person was looking to reduce their exposure to overseas property.

“This is a surprisingly healthy level of sentiment to offshore markets in light of the US sub-prime mortgage crisis,” he said.

“This is perhaps a reflection of the view that with the recent corrections in pricing benchmarks, some offshore markets are beginning to look attractive again and offer better value.”

However, mentioning credit and interest rates prompted the opposite reaction among respondents.

“Consistent with the recent tightening of credit conditions, there has been almost a complete reversal of the sentiment towards credit availability and interest rates,” Talbot said.

The overwhelming majority (92 per cent) of those surveyed believe interest rates are impacting the market negatively.

When the survey was conducted in 2006, respondents viewed credit availability as having a positive effect on the short-term real estate market (net balance of 69 per cent), but today, the market has almost completely reversed to a net balance of negative 64 per cent.