By Anthony Keane
From: News Limited Network
November 25, 2012
MORE than three-quarters of landlords are feeling positive about their property investments despite falling prices.

A new report by research group BDRC Jones Donald says 77 per cent are positive about their real estate investment and one in five plan to buy another property within 12-18 months.

The high level of confidence is “a surprise”, says BDRC Jones Donald managing director Roger Donbavand, who attributes it to rising rental incomes and low vacancy rates.

“Those who increased rents last year are more likely to make further increases in the next six months,” he says.

“They think that, in the medium and long term, this will deliver returns for them and are more confident with the property market than they are with financial markets.”

However, 42 per cent believe being a landlord has become harder in recent times.

“It’s not that they’re going to give up being a landlord – it’s that there are things in their life they are being squeezed on,” Donbavand says.

BDRC Jones Donald interviewed 500 landlords and found that 47 per cent had seen an increase in tenant demand and an increase in rental income in the past year.

In contrast, capital city house prices have dropped 0.4 per cent in the past year, according to RP Data.

Donbavand says the study is the first of its kind in a decade, and shows that the majority of investors are married, professional couples with an average 1.9 properties in their portfolio. More than one-fifth of landlords have no property insurance, and just 52 per cent consider residential building insurance is essential.

Property lecturer, author and investor Peter Koulizos says house prices have failed “miserably” to keep up with inflation in the past couple of years, but investors have shown resilence because Australia has not slumped as much as property markets overseas.

“We have been threatened with the bogeyman but it doesn’t look like he’s going to come to Australia,” he says.

“The worst didn’t become reality. People are thinking ‘my property didn’t drop horrendously, my tenants didn’t leave en-masse, but my loan repayments are much lower than they were a few years ago’.

“Most people go into property investment for the long-term capital gain.”
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