COVID-19 has encouraged property investors to cast a wider net in their search for deals and a third are seeking properties more than 200km from where they live.
Investors are also increasingly shunning their home suburbs, with only 6.9 per cent buying property in the streets near where they lived, according to an MCG Quantity Surveyors study.
The research analysed the details of 1000 investors who commissioned depreciation reports in the year to May 2020 to get a picture of their buying habits.
About 36 per cent bought within 10km of their primary residence, while about 30 per cent bought more than 200km away. Investors in the latter category purchased an average of 293km away.
MCG director Mike Mortlock said the proportion of investors buying locally was well down from 10-20 years ago and was a sign many were putting aside familiarity in the pursuit of “potential”.
“There’s been a tradition among Aussie investors to buy where they know and, in general, they know where we live,” he said.
“The idea of wandering too far from your ‘locality of comfort’ frightened investors in the past so an average distance of 293km is substantial.”
The trend of investors buying in further flung areas would rise as COVID-19 driven work from home arrangements sped up people’s embrace of remote technology, Mr Mortlock added.
“Online information, combined with easy access to independent professionals like buyer’s agents, has made it a cinch to confidently buy in national hotspots regardless of where you reside.”
Real Estate Buyers Agents Association of Australia president Cate Bakos said investors were using tools like Google Earth and Street View to suss out properties and were more comfortable viewing properties without physically being there.
“It’s easier to make informed decisions without being there and the experience with online technology because of COVID-19 has made investors more comfortable with that,” she said.
Ms Bakos added some investors were looking interstate to lessen their land tax burden – many states charge higher land tax on investors who own more than a stipulated number of properties.
“Various regional markets in different states are becoming more popular,” she said.
Investors once dominated inner city sales across Melbourne and Sydney, with investor buyers behind nearly 60 per cent of purchases in the NSW capital over 2016.
Buying activity from investors dropped in the years after as banks tightened their lending policies and, with rents plummeting in some inner city areas, investor activity has been largely subdued during COVID-19.
Lending restrictions were also driving investors to cheaper regional markets, Ms Bakos said. “The limitations scaled down what you can borrow and this meant many investors started going for regional properties.”