Motivations for home buyers vs property investors
With property, a hot topic of conversation amongst home buyers and investors, find out how they’re approaching the purchasing process today. Knowing how other buyers are approaching their next property purchase may help you work out your next move.
Recent research1 revealed a strong desire to invest in property, with almost half (47%) of buyers saying they either purchased or intend to purchase an investment property.
Out of the remaining 53% looking to buy their next home:
| nearly half (45%) are looking to upgrade, one-third (33%) are looking to relocate, and 14% are looking to downsize |
So what’s motivating these different property buyers? And how are they approaching their next purchase to get the most out of it?
Experienced home buyers
For buyers looking to purchase their next home, the top three motivations are:
| wanting to live in a new or better area (56%), their family is expanding (22%), and relocating e.g. for a new job (22%). |
The size (94%), location (93%) and type of property (90%) are all critical considerations for these buyers. The top things they consider essential before buying a property are the building inspection report (55%) and comparable sales in the area (48%).
Interestingly, many experienced home buyers (78%) think work needs to be done on their existing property to get it ready for sale. On average, they spend more than $12,300 to maximise its selling price.
Investors
Investors are more likely to be motivated by financial considerations when it comes to purchasing property, with:
| more than half (54%) feel that property is the best investment, and nearly one-third (30%) want to take advantage of low-interest rates. and 27% planning for retirement. |
Key things investors consider essential to know before purchasing a property are the expected rental income (67%) and expected growth in property value of the area (51%).
The location (96%), an easy-to-maintain property (94%) and being close to amenities (94%) are also things investors are likely to consider important for their next purchase.
While the majority of investors are homeowners looking to purchase a new investment property (65%), others are approaching investment differently:
| 17% are looking to turn their current property into an investment and purchase another home to live in, and 15% are currently renting and purchasing a new investment property. |
Depending on the reason for your next property purchase, keep in mind that you will have different motivations and considerations shaping your purchasing decisions. It’s a good idea to speak with a lending expert to help you with the new and unfamiliar aspects of your next move.
1 Lonergan Research conducted the study among 1,030 Australians aged 18 and over who have bought at least one property and: have either bought a second (or subsequent) property in the last five years or are looking to buy their second (or subsequent) property within the next 12 months. Fieldwork commenced on Friday, 31 January 2014, and was completed on Monday, 10 February 2014. After interviewing, data was weighted to the latest population estimates sourced from the Australian Bureau of Statistics.
2 Refers to subsequent home buyers who have recently bought or are looking to buy a property to live in (i.e. not as an investment property).
