Remote investing has accelerated for the third year running, despite the easing of Covid restrictions, and it could spell bad news for some of our tightest rental markets.
According to new research from MCG Quantity Surveyors, which has offices in Sydney, Melbourne, Newcastle, Brisbane, Adelaide, Perth and Canberra, the latest analysis of client data showed the average distance between where landlords live and where they invest has reached 857km for the year to February 2023.
MCG Quantity Surveyors Managing Director Mike Mortlock said this was up from 559km in the year to November 2021 and 294 km in the pre-pandemic period to January 2020.
“There was a possibility once lockdowns restrictions eased, the re-introduction of in-person inspections could have seen investors choosing assets closer to home,” Mr Mortlock said.
“Instead, the opposite has happened. Investors have embraced remote investing and are now entirely comfortable with securing property assets in the best possible markets regardless of location.”
Mr Mortlock said this should be concerning for rental markets where anti-landlord legislation has been introduced, such as in Brisbane, which has a rental vacancy rate hovering around one per cent.
“Our tightest rental markets are suffering from a severe shortage of rental property supply, but much of that is due to politics rather than market forces,” he said.
“Remote buying lets investors vote with their dollars when it comes to legislative changes in the tenancy space. Expect those jurisdictions which introduce anti-landlord/protenant/high-tax legislation to feel the sting of even further reduced investor participation.
“Our data indicates these regions should be looking to entice more investment from right across the nation, not discourage it through anti-investor rhetoric and ongoing restrictions that favour tenants over landlords.”
Mr Mortlock said some of the most promising investment markets were well away from the major east coast capitals, with Perth experiencing a substantive uptick in investor activity.
He said price point played a large role in investors’ decision-making as did the opportunity to view a property from afar using technology.
“Investors are drawn to price accessible options,” Mr Mortlock said.
“The average price an investor now pays for a property is $691,045 according to our research.
“That sort of figure for house investors in particular is more easily achieved outside of the big capital cities.
“Our widespread acceptance of doing business remotely has had a lot to do with the shift.
“Nowadays you are just a video call away from any buyers’ agent, conveyancer or building inspector in Australia.
“This has opened the entire nation as a market to smart investors.”
Mr Mortlock said his long-term outlook for remote investing is that it will continue to gain traction.
“Investors will continue to grow comfortable with buying remotely and ‘site unseen’ as the calibre and quality of data improves,” he said.
“This is particularly so for landlords needing to maximise their cash flow in the face of rising costs.”