Investors intend to boost property portfolios over next three months: MLC survey

Investors in all states except South Australia and the Northern Territory plan to increase their exposure to property over the June quarter, a sentiment survey has found.

High income earners, those working in professional jobs and people living in larger households were most likely to say they intended to boost their property investment portfolios over the next three months, the latest MLC Quarterly Australian Wealth Sentiment Survey revealed.

More than 2000 people responded to the national survey, which was released in mid-April.

Investors were asked about their existing financial situation and whether they were more or less likely to invest in certain asset classes over the next three months.

Investment property was the only growth asset to which respondents planned to increase their portfolio allocations, although appetite for investment property was down slightly from the previous survey for the December quarter.

All groups said they would cut their holdings of shares and diversified balanced funds over the June quarter.

Source: MLC Quarterly Australian Wealth Sentiment Survey Q1, 2014

The results are in line with an improvement in broader consumer sentiment towards residential property, as recorded by the NAB Residential Property Index, which rose one point to a high of 37 in the March quarter.

The outlook for house prices improved across all states except Victoria, with further increases expected in the next six, 12 and 24 months. Rental growth, however, was subdued indicating investment property yields could fall.

Source: NAB Quarterly Australian Residential Property Survey: Q1 2014 

Around 30% of respondents to the MLC sentiment survey who earned more than $100,000 already had property investments. Some 10% of people in that wages bracket said they planned to invest more in property over the next three months.

Property was a more popular investment choice with younger people than with those aged over 50. Around 10% of people aged 49 and under said they were looking to buy property during the June quarter. On a net investment basis, over-50s intended to slightly reduce their property exposure.

Debt reduction was the top priority for the majority of people surveyed with around one in three saying that would be their goal for the three months to the end of June.

A large group also said they would invest more in cash and term deposits, as well as superannuation in the coming months.

This article first appeared on Property Observer.