A Guide to Investment Property In Australia
Diving in the Great Barrier Reef. Skiing in the Australian Alps. Exploring the Outback. Catching a glimpse of a kangaroo or a koala. Taking in Phillip Island and its renowned penguins - the sights, sounds and experiences that make up the Australian adventure are incomparable…
Thanks to its incredible tourism draws, its stable government and its potential for growth and proven real estate market track record, Australia is a country that commands a high level of property investor confidence. At Nubricks.com we cite the following 10 factors as those that are helping drive investor confidence in investment property in Australia: -
1) Governmental Stability Inspires Real Estate Investor Confidence in Australia
Australia’s democratic form of government has been in place and quite stable for well over a century. The stability of this country and its strong international ties and favourable standing in world politics help inspire investor confidence in Australian property. Investors that seek a country with stability and incredible holidaymaking potential are hard-pressed to top Australia.
2) Australia’s International Tourism Draws Appeal to Visitors and Investors Alike
It is hard to deny the unique tourism draws Australia has in regard to driving investor interest in this country. From the Great Barrier Reef to the world famous Sydney Opera House and from the Outback to the rainforests this country has tourism draws like none other. The number of resort areas, the potential for adventure and the distinctly cosmopolitan flair of its big cities combine to make this country very appealing to holidaymakers and investors alike – and any number of investment strategies can be targeted to specifically tap into the tourism market demand for rental accommodation.
3) Australia’s Strong and Growing Economy is Favourable for Property Investors Currently
Australia’s economy is quite strong and continues to grow. With a mining boom presently going on in the Brisbane area and a constant influx of holidaymakers, the potential here remains strong. The GDP is estimated around USD 707 billion and its growth rate is on the upswing by about 3%. Mining, oil, tourism, media, aerospace and agriculture drive the country’s economy. The overall economic outlook is positive, which appeals to buyers who want a stable environment in which to invest.
4) Australia’s Established and Proven Property Market Appeals to Property Investors
Whilst the prices in Australia are higher than in other investment destinations, its overall potential and low-risk factor makes it very appealing to a broad range of property investor. The market here is proven and with immigrants continuing to add to the population figures annually, along with millions of holidaymakers coming in each year, the demand here does not appear to be going away any time soon. The market lends itself well to buy-to-let and but-to-hold strategies. Whilst buy-to-flip can net big returns in some areas, many find the holding approach nets them greater returns. The overall stability of the property market inspires confidence in Australian investment. The lower cost of living and favourable exchange rates also appeal to buyers.
5) Australia’s Large and Growing Expat Community Helps Make Investors, Holidaymakers and Retirees Feel Comfortable Here
More than 1.3 million Brits call Australia home, along with a host of other expatriates from different lands. With more than 11,000 new British immigrants coming to Australia to work or retire each year, the expat community here is quite large. This works to create a friendly environment for holidaymakers, retirees and incoming expats, which is always good news for investors.
6) The Longstanding Favourable Relations with the UK and Europe Make Australian Investment Inspire Confidence
The Australian and UK relationship has historically been very close and remains so. As a Commonwealth country with Queen Elizabeth II as its head of state, the two share much in common. The relations between Australia and the UK as well most of the world, make for a very favourable investment climate. In addition to strong ties with the UK and Europe, Australia maintains very close connections with the US, and is considered a long ally of that country…all of this gives property investors massive confidence in the long term stability of the market into which they are committing their funds.
7) Australia’s Strong and Ever-Growing Tourism Industry Bodes Well for Property Investors – Particularly Those Taking a Buy-to-Let Approach
Australia has more tourism draws that any one person could possibly list out. From its incredible Aboriginal history and its rugged, but strikingly breathtaking landscapes to its booming cities and quaint wine country villages, this country has something to appeal to everyone. With the Great Barrier Reef and the great Outback, running out of things to see and do is not a problem for holidaymakers in Australia. This is evidenced by the strong and growing figures Australia boasts. According to the World Travel & Tourism Council the industry will command about USD 122 billion in 2007 alone. The growth in demand is anticipated to increase by nearly 4% per annum through 2017. Indeed, some 700,000 Brits alone visit Australia on an annual basis. The country is readily accessible from most major airports.
8) The Climate and Geography of Australia Combine to Appeal to Many Kinds of Holidaymakers, Expats, Retirees and Investors
Whilst many people think of Australia and immediately picture vast expanses of bush and desert, that image does not tell the whole of the story. Australia has an incredibly varied geography and climate to go along with it. Australia includes coastlines along the Indian and Pacific oceans and the Timor and Arafura seas. It also is home to vast desert landscapes, mountain ranges, rainforests, swamps, bushlands and more. The climate here varies from quite tropical in the north to temperate in the south. Considering this, holidaymakers, expats and investors will find everything from beach resorts to alpine ski areas to capture their fancy. The diversity of this country is one of its many appealing factors that drives holidaymaking and investment.
9) Australia’s Welcoming Environment Encourages Investor Confidence and Attracts Expats, Retirees and Buyers
On the whole, Australians are a very welcoming bunch who make holidaymakers, investors, expats and retirees feel at home. This is evidenced by the 1.3 million Brits who already call this country home, and the more than 11,000 who join their ranks each year. The friendly environment and desire for foreign immigrants and holidaymakers appeals to investors and opens the doors wide for several different investment strategies.
10) Reasonable Tax Structure and Return Rates Appeal to Property Investors Who Seek Solid Financial Gains
Australia’s property market, like all others, has its shares of ups and downs. The overall climate is good for investors however. The tax structure includes a limited capital gains tax for foreign investors, a flat 10% value added tax, no inheritance tax and a fixed stamp duty. Also, the potential for returns on investment is high. Whilst it is true prices are dropping in some areas, this is not the case everywhere. In areas such as Perth, the capital growth rate was around 40% per annum in 2006, according to PropertyShowRooms.com. Rental yields are in the 6% to 7% range in many areas, as well. With thousands of new expatriates and millions of holidaymakers travelling here each year, the potential is high and lends itself to several investment strategies.
Australia’s close ties with the UK and its incredible landscapes, climate and overall atmosphere make this country a favourite for retirees, expatriates, holidaymakers and most especially real estate investors. With its sustainable tourism industry and ever-growing British population, Australia’s star still shines brightly.
