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Welcome to the AUSTRALIA Focus opportunity
Regardless of World Wars, Disasters, Stock Market Crashes and the Global Financial Crisis, Australian Property Prices have consistently and historically “weathered the storm”.
Australian properties have enjoyed consistent capital growth over the last 100 years, with property prices doubling roughly every 7 to 10 years.
Australian Construction analyst BIS Shrapnel has forecast median house prices to increase in all capital cities by 2017 spurred on by low interest rates and an ever increasing population.
In the next 3 years, the city of Brisbane’s median house prices are expected to climb by 17 per cent to $555,000, Sydney is predicted to jump 10 per cent to $875,000. Melbourne’s median prices are expected to rise by 8 per cent to $690,000, while Adelaide’s are expected to climb by 5 per cent to $435,000.
Median house prices in Perth, Hobart, Canberra and Darwin are all expected to increase by 3-4 per cent, with prices reaching $565,000 in Perth, $645,000 in Canberra, $525,000 in Darwin and $385,000 in Hobart.
THE WAY WE SEE IT
Australia creates more jobs that it loses; the Australian Bureau of Statistics (ABS) recently published unemployment statistics for May 2014 that concluded that the national unemployment rate was steady at 5.8% for the 3rd month in a row. Historically, Australia has had one of the lowest Unemployment rates in the world.
Interest Rates & Obtaining Loans
When the Global financial crisis hit, the Australian banks reacted immediately by dropping the interest rates (to further encourage local spending) where they have remained ever since.
At its June 3rd, 2014 meeting, the Reserve Bank of Australia decided to maintain the cash rate unchanged at a record low 2.5 percent further indicating that’s where they will stay for some time to come.
Australia’s top 4 banks are rated in the top 15 in the world. They have many restrictions and are very prudent with lending and therefore never got caught up in the whole subprime crisis and with defaults less than 1%, they remain in a very strong position.
Many Australian banks have opened their doors to non-residents and offer attractive rates, features and incentives to entice offshore Investors, including making the overall lending process a reasonably simple one.
The Australian Bureau of Statistics (ABS) has recently calculated Australia’s population will almost double to 40 million people by 2060 with Migration forecast to be one of the main drivers.
Soaring demand for skilled labour, fuelled by the recent mining investment expansion, coupled with Australia’s position as a favoured destination for those aspiring to better educations, job opportunities and family lifestyles, has resulted in a steady annual flood of skilled arrivals.
Safe legal structure
Australia has a well-established legal and property buying system with investment Markets that are regulated and the investor protected.
The legal system is weighted heavily to protect the interests of all landowners and does not discriminate against foreign owners in any way.
Strong consumer laws Protect Property Investors by governing the standards of construction, whereby you can safely rely on developers and Builders to deliver you a property to the highest of building standards no matter where you located.
Property Rental Market
Australia has a stable and ‘in demand’ rental market which ensures investors can readily obtain tenants for their property.
Vacancy rates are reasonably low in most capitals cities with demand outstripping supply in some areas.
Supply versus Demand
Population growth in Australia is nearing the highest it has been in the last 40 years. That means there are more people needing a roof over their head than ever before.
Australia needs to produce approximately 180,000 new dwelling’s a year while its current output is only around 130,000 new dwellings.
Factors such as a skills shortage, red tape for development approvals and tougher bank lending criteria have stalled the output, increasing the shortfall between supply and demand, which is leaving an accumulative shortage year on year.
This accumulative year on year shortfall has been labelled ‘Australia's future housing crisis’ and one that the savvy global Property investor is wise to take advantage of.
Australia is a very Tax friendly country and for a property investor, there are many incentives and tax benefits including not only property expenses that can be claimed, but depreciation which can significantly boost cash flow.
New property provides greater levels of depreciation than older property so those looking for improved cash flow may be incentivised to look for newer or off plan properties.
It may also provide the property investor with distinct tax planning advantages to reduce the impact of Australian taxation should you become an Australian resident.
If you are contemplating migration to Australia at some future date, then acquiring property prior to your arrival is indeed highly beneficial.
Not only will it allow you to acquire a stable investment Property in Australia at “today’s” price, but also it will provide you with a strong financial platform in the eyes of Australian Banks upon your arrival to build a more secure life and credit rating in your new country.
The Australian property market continues to offer one of the most stable and safe locations for investment property World Wide.
Australia has all the proven fundamentals of a sound property investment and is about to head into another upward swing in property prices over the next 3-5 years.
If you ever needed one more ‘reason’ to invest in Australia, that reason is ‘timing’ - now is the best time to take advantage of the market and make your next global property investment an Australian one.
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