Property is seen as a low-risk investment, guaranteed to yield long-term capital gains, according to a report released this week by the Australian Housing and Urban Research Institute (AHURI).
Many private rental investors perceive property as a long-term, safe and stable investment that is low risk and will produce guaranteed returns. The report found that investors generally expect capital gains from investing rather than rental yield, and this is how they measure the success of their investment.
But it's not just about the money. Other reasons include personal goals (i.e. retirement home or future home for children at university) and household circumstances (i.e. proximity to their own dwelling).
Sentimentality and informality characterise investors' approaches to the housing market. Property is considered familiar, relatively easy to invest in (not mysterious and complex like other investments) and something lots of people do.
The research found that many investors use their own measures of quality and personal preference when selecting a dwelling even though they will not be living in the property.
Age and personal circumstances (i.e. retirement), rather than market factors, appear to be the dominant considerations for those who had recently sold property or were intending to sell in the immediate future.
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