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It is becoming \u201cthe new normal\u201d for property investors to invest in markets far away from where they live.<\/p>\n
A study by MCG Quantity Surveyors, which analysed investor transactions over the year to January 2020 and over the year to 2021, revealed the changing investor buying habits, particularly in terms of where they choose to invest in.<\/p>\n
The average distance between a landlord\u2019s home and their investment property had significantly increased over the two time periods, rising from 294 kilometres to 559 kilometres.<\/p>\n
MCG Quantity Surveyors managing director Mike Mortlock revealed that remote and borderless investing had been supercharged by the COVID-19 pandemic.<\/p>\n
\u201cRather than going to ground during lockdowns, it seems investors looked for real estate opportunities further from their home suburbs than ever before,\u201d he said.<\/p>\n
\u201cWhat\u2019s perhaps most telling is the rapid increase in those looking for assets positioned exceptional distances from their home.\u201d<\/p>\n
The study found the proportion of buyers investing in locations more than 200 kilometres from their home rose to 44.7% in the year to November 2021, up from the 29.5% achieved in January 2020.<\/p>\n
Interestingly, the share of buyers investing in properties more than 1,000 kilometres away from their home more than doubled, from 7.7% in January 2020 to 17.15% in November 2021.<\/p>\n
\u201cThe latest numbers showed just 6.75% of Australian-based investors bought within their home suburb. I\u2019d suggest this is a dramatic drop from the proportion we\u2019d have seen 10 or 20 years ago,\u201d Mr Mortlock said.<\/p>\n
Why distance buying became attractive<\/h2>\n
The study also found that Queensland was the top choice for many investors, with more than a third of investors cashing in on the state\u2019s booming conditions.<\/p>\n
Closely behind Queensland was New South Wales, which also shared a third of all investors.<\/p>\n
Around 11% of investors chose to invest in Victoria while all states made up the remaining 15%.<\/p>\n
Mr Mortlock said there are several reasons behind the distance-buying trend and on top of the list is the changing dynamics amid the lockdowns and economic uncertainties.<\/p>\n
\u201cTechnology makes it possible to buy property from the comfort of a locked-down home. Modern day investors see the whole of Australia as a potential market \u2013 not just their state or city,\u201d he said.<\/p>\n
Furthermore, Mr Mortlock believes buying remotely has become more convenient as more investors rely on local buyers\u2019 agents.<\/p>\n
\u201cAlso, the surging popularity of regional relocation in this remote working world has boosted those property markets.\u201d<\/p>\n
A recent report from CoreLogic found that the surging demand in regional markets have already caused concerns on affordability.<\/a><\/p>\n \u201cWhile the figures might come back a little, I suspect the world has changed for good and long-distance buying is well and truly established,\u201d he said.<\/p>\n \u201cThere\u2019s little evidence we\u2019ll see percentages returning to pre-pandemic levels anytime soon.\u201d<\/p>\n \u2014<\/p>\n Photo by Helena Lopes on Unsplash<\/p>\n<\/p><\/div>\n
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