Capital Growth

Capital Growth The Key For Investors

The potential for future capital growth remains the number one incentive for Queensland property investors, according to new research from the Real Estate Institute of Queensland (REIQ).

The REIQ conducted buyer and seller behaviour research late last year which found capital growth was the top reason for buying an investment property in Queensland for 74 per cent of buyers.

The next most common reasons to buy investment property were to fund retirement; for negative gearing purposes; as a means of deriving an income stream; or because they believed it offered a better long term return than shares or super.

“Three-quarters of the investors surveyed across the state indicated they bought investment property because of the potential for future capital growth,” REIQ managing director Dan Molloy said.

“While Queensland has had a very tough start to 2011 it is heartening that many investors recognise the strength of our property market and the opportunities that remain for growth over the long-term.

“The fundamentals that attracted property investors to the Queensland market in 2010, such as the robust resources sector and solid infrastructure investment, will continue to be in play in 2011.”

Of all the buyers surveyed in the research, 13 per cent bought a property for investment purposes. The REIQ conducted similar research in 2003 which found that the proportion of investors was 40 per cent however this number of investors was unusually high given the economic conditions of the time.

“Investors have mostly stayed on the sidelines over the past 18 months, but there are tentative signs they are re-entering the market,” Mr Molloy said.

“With stable rents, increasing demand and less pressure on property prices, there are plenty of opportunities currently available for investors to enter the market.”

Source: Nicola McDougall, REIQ Media Manager