Almost 50% of investors plan to hold property for more than 10 years

August 11, 2017

Nearly one in two Australian investors intend to hold onto their property for more than a decade, new data shows.

Mortgage Choice's annual Investor Survey revealed 45.6% of Australian investors plan to keep their property for 10 years or longer.

“Property investors are savvy and they understand that property investment is a long-term strategy,” Mortgage Choice chief executive officer John Flavell said.

“Property investing is not a ‘get rich quick' scheme. Potential property investors shouldn't invest in this particular asset class if they believe that they are going to make a lot of money overnight.

“The reality is when you invest in property, it will take time before you see any significant growth in the value of your investment.

“In fact, most of the time when it comes to property investment, the longer you hold onto the dwelling, the more money you stand to make.

“There are a lot of costs involved in buying and selling a property, such as stamp duty, agent fees, and pest and building inspections, and you are likely to reduce the impact of these costs on your hip pocket with time.

“Moreover, the housing market moves in cycles and it will go through highs and lows. So, if you buy at the top of the market and plan to sell it a few years later, you may find that the market has softened and you could end up making a loss on your investment.

“National figures from CoreLogic's recent Pain & Gain report found that in the March 2017 quarter, houses that resold at a profit had typically been owned for 9.1 years, and apartments that resold at a profit had been held for 7.6 years.

“On the other hand, houses that resold for a loss had typically been owned for 6.3 years, while apartments that resold for a loss had typically been owned for 6.9 years.

“Of course, each city and region will differ, and at the end of the day, no one has a crystal ball to predict what will happen in the future.”

Mr Flavell said with interest rates still at historic low levels, now was a good time to purchase an investment property.

“If you are intending to buy an investment property, make sure you approach it with a long-term vision,” he said.

“Do plenty of research and take note of any areas that are poised for growth in the coming 10 years. New infrastructure projects can be a good indication that a suburb will see a rise in demand for housing.

“At the end of the day, property investment is a significant financial decision and not one that should be taken lightly. Do your research, deal with professionals, and always take a long-term approach.”