Residential property set to boom: survey

THE residential property market is set for a resurgence even if interest rates rise, according to a property investors survey.

THE residential property market is set for a resurgence even if interest rates rise, according to a property investors survey.

The Ashe Morgan Winthrop bi-annual report surveyed 846 small and large property investors on trends in the residential, office and industrial markets.

Almost 73 per cent of property professionals said they expected growth in the residential market in the next six months, up 6.8 percentage points on the previous survey released in March.

Nearly 55 per cent of respondents said they preferred to invest in residential property in the next six months over all other property classes, 1.2 percentage points up on the last survey.

"After the doom and gloom of the past two years, we are now seeing a renewed confidence across the residential market," Ashe Morgan Winthrop director John Winter said.

"The widespread confidence comes in spite of the fact that investors are expecting another interest rate rise," he said.

Mr Winter said property professionals had already factored a rate rise into their investment plans, so when it happened there should be no cause for alarm.

The survey found 71 per cent of property professionals expected an interest rate rise of at least 25-basis points within six months, up 32 percentage points on the previous survey.

Queensland property professionals lead the nation on intention to invest in property, with more than two-thirds of respondents in that state saying they intended to invest over the next six months.
More than 85 per cent forecast that Queensland's residential market would improve over the coming six months, up 10 percentage points on the last survey.

"There is an increasing level of confidence among key investors that Queensland's boom will continue because the state's fundamentals are so strong," Mr Winter said.

NSW had the strongest resurgence in investment intentions, with 64 per cent of the state's property professionals reporting they were likely to invest over the next six months, up 5.8 percentage points.

More than 63 per cent say the NSW residential market will improve over the same period, a rise of 8 percentage points compared to the previous survey.

Investor interest in Victoria also rebounded, with more than 61 per cent saying they are likely to invest in property in the next six months.

Only 58.6 per cent of respondents in Western Australia said they intend to invest in the residential sector over the coming six months - the weakest result of the four largest states.

"According to our survey, most property professionals now agree the WA market has reached its peak," Mr Winter said.

Property professionals were also surveyed on how well they believed the Reserve Bank of Australia (RBA) and federal government were managing the economy.

Just over 62 per cent rated the RBA's management of the economy as effective compared with 72 per cent in the last survey.

Support for the the federal government's economic management slipped slightly, from 73.5 per cent six months ago to 73 per cent.