Investors buying properties further from home

A new study has found that in just two years, property investors have nearly doubled the distance between where they live and where they invest.

According to the Property vs. Postal survey from MCG Quantity Surveyors, in the year to January 2020 the average distance between where an investor lived and where they bought their investment property was 294 kilometres.

However, this distance nearly doubled to 559 kilometres in the 11 months to November 2021.

Mike Mortlock, managing director of MCG Quantity Surveyors, said the data shows that remote and borderless investing had been “supercharged by COVID-19”. 

Mr Mortlock commented: “Rather than going to ground during lockdowns, it seems investors looked for real estate opportunities further from their home suburbs than ever before. 

“What’s perhaps most telling is the rapid increase in those looking for assets positioned [at] exceptional distances from their home. 

“Buyers investing in locations more than 200 kilometres from home rose from 29.5 per cent in January 2020 to 44.65 per cent in November 2021.”

He added that the percentage investing more than 1,000 kilometres from home more than doubled during the period.   

“The latest numbers showed just 6.75 per cent of Australian-based investors bought within their home suburb. I’d suggest this is a dramatic drop from the proportion we’d have seen 10 or 20 years ago,” he said. 

The analysis also revealed the state most buyers choose to invest in. 

Queensland was the most popular investment destination, according to the quantity surveyors, with 37.44 per cent of their investor clients buying there. 

This was followed by NSW with 34.31 per cent.

Victoria saw just 11.31 per cent of the investor pool, while the rest of Australia made up the remaining 15.94 per cent.

The MCG Quantity Surveyors MD said a range of factors had made distance buying an attractive option: “Firstly, lockdowns and economic uncertainty during the pandemic has had Australians thinking long and hard about their financial situation, so investing has been front of mind.

“Technology makes it possible to buy property from the comfort of a locked-down home. Modern day investors see the whole of Australia as a potential market – not just their state or city,” Mr Mortlock added.

“Also, the surging popularity of regional relocation in this remote working world has boosted those property markets. Capital growth rates in many regional centres rivalled big cities in 2021, and investors want to get a piece of this action.

“Finally, it’s very easy to outsource your buying and due diligence to local buyers’ agents. Investors can rely on their advice about where and what to buy, and they are all about the numbers, not the emotional ties of location.” 

The MD said that while he expected the rate of remote investors would ease back once borders reopen and “life returns to some semblance of normal”, he added that he suspected “the world has changed for good and long-distance buying is well and truly established”.

“There’s little evidence we’ll see percentages returning to pre-pandemic levels anytime soon,” Mr Mortlock concluded.

[Related: Qld recorded highest interstate migrants during pandemic: REA]