Investors weigh in: The best and worst states for property

Data from the PIPA report revealed that the move towards regional markets sparked by the pandemic has continued to ease. The survey reported that 72.2 per cent of respondents intend their next investment property to be located in a capital city.

Not all state markets are made equal, however. According to the PIPA results, investor attitudes vary substantially from state to state.

So which states are investors snapping up properties within? And which ones are they trying to avoid?

Queensland

The Queensland market, the PIPA survey reports, is suffering from a “mass exodus” of investors from both metropolitan and regional markets. Once the golden child of Australia’s housing markets, the Sunshine State’s reputation is beginning to sour.

When asked to rank the investment opportunities of each of state from best to worst, investors placed Queensland well down the bottom, receiving an average ranking of five out of the eight states and territories. Only 29.3 per cent nominated Queensland as their number one pick – down from 58 per cent in 2021.

This trend has been observed across both Brisbane and regional Queensland markets alike. One in five Brisbane investors sold a property in the last year, and 16.4 per cent sold a property in the regions.

PIPA chair Nicola McDougall believes that the downturn most likely stems from the Queensland government’s “restrictive, unfair and inefficient legislative reforms that adversely impact property investors”.

Victoria

If Queensland fared badly in the PIPA survey rankings, Victoria fared worse, consistently placing at the bottom of investors’ lists. Only 3.1 per cent of investors named Victoria as their first choice – a decrease of over 50 per cent from 2022.

Victorian property sales have continued to surge, with one-third of survey respondents reporting having sold one or more properties in Victoria in the last 12 months. Regional Victoria and Melbourne both experienced significant sales, that majority of which passed on to owner-occupiers rather than investors.

Like Queensland, Victoria has led the way in legislative reforms, with a brand-new Housing Statement and an annual property tax on the table under the current administration.

NSW

NSW remains one of the more favoured markets, according to the survey. While the state similarly experienced high sales trends, PIPA observed that NSW is “the place to invest”.

Nearly one in three respondents put NSW at the top of their list. Of these respondents, 10.5 per cent selected Sydney as their top choice of Australia’s capital cities.

Nevertheless, sales continue to rise in NSW, as 20 per cent of respondents reported having sold at least one property in NSW in the last year.

Western Australia

Western Australia emerges as another popular choice amongst investors. Ranking number two out of the states and territories, Western Australia was home to the investors’ top-ranked capital city. Perth investors reported substantially fewer sales than Melbourne and Brisbane, with only 6.4 per cent of respondents reporting a sale in Perth in the last 12 months.

South Australia

With similar sale rates to Western Australia, South Australia suffered comparatively more lightly from the mass-departure witnessed across the nation. Adelaide was the third most popular capital city to invest in, making South Australia a popular choice.

ACT, Northern Territory and Tasmania

The ACT, the NT and Tasmania continue to be home to comparatively fewer investment properties. While the trend towards selling continues to make itself felt across these markets, Tasmania occupies a comfortable third place on the respondents’ preference list. The nation’s capital and the territory markets are more lukewarm, coming in at sixth and seventh respectively.