No surprise that finding a property is first time investors' biggest worry

No surprise that finding a property is first time investors' biggest worry
No surprise that finding a property is first time investors' biggest worry

Mortgage Choice says it’s surprised by the results of its own survey of property investors.

Why? Because the people at Mortgage Choice have their heads as full of misinformation about real estate issues as everyone else out there.

They apparently expected the survey to show that saving a deposit was the biggest problem faced by property consumers, given the (alleged) big increase in property values around the nation and the (apparently) ongoing affordability crisis.

But the survey showed that the biggest challenge for investors was finding the right property, while affordability issues ranked well down the list of concerns.

There’s actually nothing surprising in any of that. You just need to have a little market knowledge – by which I mean real knowledge, not vague impressions absorbed from media sound bytes.

Mortgage Choice issued a press release, which presumably was designed to generate credibility for the organisation, but it did the opposite.

Here’s what the media release said:

“According to Mortgage Choice's 2014 First Time Investor Survey, 50.6% of investors who purchased their first investment property within the last two years said finding the right property was the hardest part of investing. Mortgage Choice spokesperson Jessica Darnbrough said the results were surprising, especially given the current market conditions. With property values climbing considerably over the last 12 months, we expected to see more first time investors saying their biggest challenge was saving a deposit, Ms Darnbrough said. Instead, just 15.3% said 'saving a deposit' was the biggest challenge they faced when investing in property.”

A couple of points about that - property values haven’t been climbing considerably in the last 12 months. Only in Sydney (and, more recently, in near-Sydney centres) have property values boomed. Most major cities and regional centres have had only moderate growth and some have had no growth at all.

While media continues to fabricate an affordability crisis, the two quarterly indexes published on affordability show the opposite is true. They’ve both just published their latest editions and found that affordability continues to improve and is the best it’s been in 12 years.

How can national organisations that make their living from real estate be so badly informed about it?

It’s no surprise that finding the right property is the biggest issue for novice investors. At Hotspotting we encounter this from consumers on a daily basis. The most commonly used word is “overwhelmed”.

Real estate consumers are overwhelmed by many things, including the massed of bad and conflicting information, but most of all by what to buy and where to buy it. This is a seriously large country with tens of thousands of locational choices. Sydney alone has over 700 suburbs.

The key element missing for most investors is not financial capacity – it’s the absence of a clear strategy for putting their financial capacity to effective use.

The investors who are not overwhelmed are those who have a clear set of goals, an understanding of their risk profile and borrowing capacity, and a strategy for achieving the end game.

Investors like that are quite rare – which is why the Mortgage Choice survey found that most novice investors struggled with finding the right property in the right location.

You can contact Terry via  email or on Twitter.

Terry Ryder

Terry Ryder

Terry Ryder is the founder of

First Home Buyers Terry Ryder Finance

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