Melbourne is the new darling city for investors, according to a poll released by Property Investment Professionals of Australia (PIPA).
Recognising the flat performance of house prices and an oversupply of apartments near the CBD, investors believe Melbourne will deliver the best capital growth of any Australian centre in the next 12 months.
Their outlook would be a silver lining for the Melbourne property scene, which has failed to keep pace with the stellar value increases of Brisbane, Adelaide, Perth and the consistency of its “arch-rival” Sydney.
Some 26.2% of respondents to PIPA’s annual Investor Sentiment Survey said the Garden City was the best place to invest.
However, it was not a runaway winner in the popularity stakes.
Big votes of approval came for two of the booming real estate centres – Perth (25.1%) and Brisbane (17.8%).
In the PIPA survey, Brisbane has been among the top two investment destinations for several years. Its fall down the table of popularity may signal a response to the city’s fast-climbing values of the past two years.
Some believe Brisbane has likely hit its zenith in terms of value increases, signalling a positive time for investors and owner-occupiers to consider their options.
Regional Queensland was considered the best regional market in which to invest, according to the survey.
PIPA also found investors were concerned about proposed rental reforms and the implementation of new taxes, which they said had forced them to increase rents to protect their yields.
PIPA noted that these challenges – mostly implemented at a state government level – had achieved the opposite outcome to the policy promises offered by political leaders.
Almost 40% of respondents said rents would rise further if state governments continued to increase operating costs.
More than 86% of respondents said their biggest concerns with their investments came from state government interference, such as regulation, and rental caps or freezes.