Australia’s Investment Property Market Continues to Boom
Australia has recorded its twelfth month of unprecedented growth in investment properties as the country’s economic stability and high demand for rental accommodation leads the world.
Australia has enjoyed consistent growth in its property market, seeing all time high rents and enviable interest rates. While most international buyers look to local investments, Australia is seeing a massive uptake in investment property purchases from neighbouring Asian countries.
Why is Asia hungry for Australian investment properties?
Right now, Australian rental returns sit at well above the standard 4% and interest rates in the country are near zero. For international investors, Australia offers a Double A trade rating, world class infrastructure and an unprecedented rental shortage. Australia also welcomes international investment with tax incentives and visa allowances. As China enters uncertain domestic economic times and many other Asian countries suffering the economic ravishes of the global pandemic, Australia’s “zero covid” approach has meant stable economic recovery. In short, Australia (and New Zealand) are the safest, and most lucrative investment hot spots on the planet just now.
But there’s a catch for international buyers.
Taking on the domestic investment market, the smart way
Here’s the catch, the domestic property investment market knows the market. While international buyers flock to Sydney and Melbourne, the domestic market is running from these “overpriced” markets in favour of burgeoning regions and counties (known as LGAs domestically). With Sydney properties sitting at well over the AU$1 million (US$750,000) regional locations with twice the rental demand offer properties for a fraction of the cost.
How to find the right Australian investment property
Partner with an agent working on the ground, every time. While international investors focus on New South Wales and Victoria, Australia’s remaining states offer a “covid free” lifestyle – businesses have remained open, so renters make rent. Agents have listings. The “business as usual” feel means a simpler transaction and better rental yields. Some agents also offer “Off Market” Australian properties so you can access it first, and close the deal without competitive bidding.
“The Gold Coast is our most in demand location for international property investors – hands down. What they don’t know is that just up the road is Logan, Ipswich and Brisbane. They may not have the international reputation, but they certainly have the rental demand and the ROI on investment properties is like nothing I’ve seen in my fifteen years in this industry.” - Jace Roach, Image Realty, Queensland
Know the Australian property market
Australia’s population is spread far and wide with the majority living along the eastern coast. Imagine the US with a population of 40 million – living largely along the Eastern Seaboard, with a single city in California, a small one in Texas and a sparsely populated territory, with a few hundred thousand people in Illinois. The rest of the population is scattered through vast farmlands, deserts, and islands.
The property market in Australia is very different to anywhere else on Earth, with relatively large cities built solely for the purpose of mining and defence. When the mines run dry, or the army moves on, so does the value of your investment.
Knowing the Australian rental market is almost impossible for first time investors. Working with an agent in Australia protects you from a potential lemon in the great red desert.
Australia’s satellite cities and their epic potential
Australian properties traditionally sat on large blocks, meaning that cities have a relatively large land space compared to population size. Out of the urban sprawl has come satellite cities serving workers and services to major city populations. Right now, this is where the money’s at for Australian property investors. Not Melbourne, Geelong. Not Sydney, Newcastle. Not Brisbane, Ipswich, Caboolture, Sunshine Coast. Not Gold Coast, Logan.
Australian domestic investors are snapping up properties in these satellite cities and leaving the big-ticket capital city prices to international investors. But, with the right partner on the ground, international investors can build a rock-solid portfolio, all positively geared for profit.