Property investment in Australia

Discussion in 'Australia Property' started by ecky, Sep 22, 2008.

  1. ecky

    ecky New Member

    I'm surprised that Australia is barely mentioned here. I might sound biased but to me, Australia poses as a great place to invest in especially properties.

    - Historically, property values have doubled every 7-10 years.
    - Economically and politically it is stable.
    - Migrants are moving into the country at an astounding rate annually (increase
    - Currently facing a shortage of workforce to build more housing for the increasing
    migrants (less supply, increse rent!!:D)
    - Government provides a very friendly tax scheme to property investors.

    Any other Australians in here, maybe you can back me up!

  2. mickthepropertyguru

    mickthepropertyguru New Member

    I think you are right. Property prices are increasing but having to go over and see the properties would be tough due to the distance involved. But it is risky taking currencies into account as any Brit knows who has bought in the euro zone in the last 2 years.
    I was very fond of Glenelg, beautiful town on the beach within a few miles of Adelaide City but the rent is amazingly low and the mortgage rate is excessive.
    I have lived in a apartment in Sydney around Darling harbour for 6 months and loved the area but thought it to be pricey.
    Land might be the best way to go ?
    What do you think ?
  3. ecky

    ecky New Member

    Hey Mick, currency wise I'm not too familiar. But for property, I know that if you are not a Permanent Resident or citizen of Australia than you would have to look at new developments.

    I stayed in South Australia for 9 years and quite familiar with Glenelg. It is a developing area especially this few years where SA is going through a mining boom. Not too sure of the rent there though. Mortgage rate at the moment is around 8.7%(?), varies with diff banks.

    Land I would agree is also not a bad investment if you have the holding power. With a house and land, at least you have the rental coming in as well.

    Just read some reports, the analysts are predicting a big increase in property prices in 2010-11.

    That's my 2 cents!
  4. ecky

    ecky New Member

    Sorry, forgot to state the reasons for the boom. Well, basically, Australia now is facing a severe shortage of housing due to shortage of workers in the building industry (most workers go into the mining industry for better pay) and because migrants are increasing every year, so less supply and more demand. Plus, slow local council areas approval permits to build housing doesn't help either.
  5. erikko

    erikko New Member

    I just want to know if Australia offers beach villas? Having the view of the beach is kinda refreshing
  6. HomesOverseas

    HomesOverseas New Member

    Australia property prices up 3.7% in Q3 2009

    The average price of a residential property in Australia appreciated by 3.7% during the third quarter of this year, according to data released by Australian Property Monitors (APM)

    On an annual basis, Australia property prices increased by 7.1% compared to September 2008 with property in Melbourne, property in Hobart and property in Darwin all recording the greatest growth, up 11.4%, 11.2% and 10.5% respectively. Property in Perth and property in Brisbane saw the lowest increases of just 1.7% and 2.1%.

    Matthew Bell, APM economist, commented: “The national housing market has continued to boom in the last three months, following a very strong June quarter, with quarterly house price growth at +3.7% - the highest rate in six years.

    “Another quarter of improving employment results and share market increases of 20%, has meant that buyers are stepping into the oversold top end of the market to purchase properties at prices still below their highs in late 2007.”
  7. Damian George

    Damian George New Member

    property prices in oz will rise another 5-10% next year as there is no rental property avaliable.

    i have been raising my rental by 10% for the last 2 years and looking to do the same again

    Australian Mortgage rates though are are little steep - have a read of my other post in this forum Australian Mortgage Rates
  8. Bambi222

    Bambi222 New Member

    its a ponzi scheme

    Australian property prices are a giant Ponzi scheme.

    The reason - the only reason - they continue to be ridiculously high by international standards, is because they are already high, and the Government will do EVERYTHING in its power to keep them from falling.

    The political party in Australia that presides over a big house price fall will not see power again for decades, if not totally implode. Ordinary Australians are too heavily invested - usually the largest chunk of their disposable wealth is in their house.

    If it falls, they feel it keenly.

    So the Government restricts the release of new land and pumps up the immigration levels massively when the economy looks like stalling.

    This worked for a while but it has reached its limits and now has a net negative effect.

    Sydney used to be a paradise to live in. Now there are water restrictions, toll roads and high stress as the infrastructure that accommodated 2 million people with ease is now being expected to make do for 4 million people - the increase being 100% due to immigration.

    And the Rudd Government wants population to double again. There are also water restrictions in Queensland, Western Australia and South Australia. The only place with no trouble for water is Darwin, NT.

    But Darwin doesn't have a proper sewage treatment system, it all gets pumped into Darwin Harbour. So when their population massively increases their standard of living will fall too as the infrastructure does not get improved to deal with the population growth.

    this is coming to a head.

    Massive amounts of immigration have led to civil unrest in recent years, eg: the Cronulla Riots where a section of Sydney's Muslim Lebanese community (young males from Auburn/Lakemba) engaged in 5 nights of violent rampages including random beatings and the smashing of cars and shopfronts causing police to lock down the beaches suburbs. Nobody allowed in or out.

    This happened after Anglo Australians, angry at being picked on in their home suburb of Cronulla had a protest barbecue - which turned into an ugly racist violent brawl.

    But that's not the only indicator of multiculturalism turning sour.

    The Australian Government is importing people wholesale from Africa and moving them into Darwin and Hobart so as not to put so much pressure on Sydney and Melbourne, the traditional immigration centres.

    In Darwin, Aboriginal people, long used to being the major black community, are starting to see demographic change eg: in Coconut Grove with lots of new blacks from Africa moving in. And they don't like it.

    I lived in Coconut Grove from 2004 to 2008.

    When I moved in there were no black Africans. When I moved out, I was the last Anglo in my apartment block, and the one next door, and the one behind. All the people working in the supermarket were black Africans.

    But the local Aborigines were outraged. The Kenyan man who lived above me, Dominique, was bashed and robbed at the local ATM. He had blood pouring from his face when he knocked on my door at midnight. He knew who had done it and why - a group of Aboriginal youths and because he was the wrong kind of black. Police did nothing. Funny thing is the Aborigines there never attack the whites or the chinese. They really just don't like the new blacks.

    Fights have broken out at bus-stops (i have witnessed), and other places (i have heard about) with Aborigines resenting the new intruders.

    Keeping property prices high depends on massive and increasing amounts of immigration, which is hitting the twin walls of cultural resistance and inadequate infrastructure.

    Living standards are falling, the health system cannot cope. We also have a slight sovereign risk vis a vis the possibility of one day being invaded by Indonesia or China. This risk is not nil, but is ignored by most Australians.

    For someone in the US to invest in Australian property now, in my view, would be a mistake because the A$ is at an all time high against the US$.

    Wait at least for it to drop back down to US50c - it is cyclical. There will come a time when it is undervalued. For now it is up around US89-90c and may reach parity next year.

    You will one day be able to buy it for half price on exchange rate alone, wait for that day. Now is the time for Australian investors to look to the US to buy.
  9. paytown50

    paytown50 New Member

    This is an americans take on your real estate market. Now it should be noted I have many Aussie friends and have done buisness with aussies for some time now. I have been featured in API magazine as well. (So i know a little something about your market)

    In my mind your market is headed for a fall and a pretty big one.

    I put you guys at the very peak of your market right now and I will say in the next 6 months the bottom will fall out. To me there are two common sense reasons for this.

    1. "Well its just numbers stupid"

    (I was able to time the downturn here in the states by simple common sense math. When a 3bd 2ba home starter home started selling for 400K and up I knew the end was near.......why you ask? Simple because salaries could not keep up with this appreciation. That is to say a couple making a combined income of 70K a year was now priced out of the market. When people are priced out of the market there is natural leaning to having more sellers then buyers and that is the start of the drop. It really is common sense. Someone cannot afford a 3,000 dollar mortgage making 70K a year. Hence why so many people took advantage of the interest only loans that became all the rave here in the last ten years.)

    1A (In your loan system most homeowners have loans that are not fixed. What happens if rates go up by lets say 2 percent? I would venture to say that over 50% of homeowners will not be able to keep up with the new payments.)

    2. "Have you ever asked yourself why you didnt suffer like the rest of the west"

    (I find it interesting that Aussies have not asked themselves why your market didnt do a downturn when your goverment was doing exactly the same things as the rest of the west. Countries like the USA, Canada, England, Germany, Ireland etc etc etc etc etc. Were suffering and yet your country does not. The answer to this question can be found in one word


    Thats right the Chinese saved your market in my mind. Your country for the last 5 years has had the ability to trade with the new number one consumer in the world. Because of your close proximity in comparison to the rest of the west to China you have benefited greatly. However there is an increasing thought that the Chinese have been cooking there books and creating a SUPER bubble that will implode on them this year. I cannot post the links (since I'm not a active member yet) But just do some basic research and you will see there is a ton of thought that the chinese may fall this year.

    If that happens and the number one consumer slows down so will you only much faster and harder. Even if the Chinese do not fall. I see you guys falling because of this simple question

    What happens when the starter family cannot afford the starter home?
  10. paytown50

    paytown50 New Member

    If you read my above post you will see I'm down on the Aussie market. My advice to Aussies is sell now. I see a 6 month window on residential real estate and most likely a 12 month window on commercial but make no mistake about it

    Now is the LAST time to sale at these profits and prices.
  11. BizPropMan

    BizPropMan New Member

    Australia seems to change there immigration rules often enough that us South Africans are suffering quite badly.
    You apply for a visa now and by the time you receive it you have to re-apply to get the same perks.
    Comparing prices of property between Aus and RSA; well I'll have to invest somewhere in the Outback. Any suggestions?
    Last edited: Apr 17, 2010
  12. KateMelb

    KateMelb New Member

    Ignore the communists and tall poppy bashers: Australia's capital cities are fantastic places to invest in property because of the scarcity in residential land and the rapidly growing population.

    Melbourne in particular is a superb place to invest. With 1500 people coming to live there every week, they will all need places to live. Anything within 10kms of the Melbourne CBD is solid gold, especially if it's close to train or tram routes, parks, shops, schools and cafes.

    Beware outer lying suburbs though: these are in danger of losing capital growth as first home buyers are forced to sell on mass due to higher interest rates.

    Last edited by a moderator: Mar 6, 2013
  13. BizPropMan

    BizPropMan New Member

    Change of Heart

    As thing heat up and cool down in South Africa it is great if you wanna play the market but, if I'm looking for stability, is Aus the right place to look at?
  14. KateMelb

    KateMelb New Member

    As a local and IP investor, in my view Australia is the most stable Western country in the world to invest in. We were barely touched by the recent global recession, our economy is strong, we have no wars, plagues, frequent major natural disasters or civil unrest so people flock here in the thousands every week fuelling a red hot property market.

    Last edited by a moderator: Mar 6, 2013
  15. BizPropMan

    BizPropMan New Member

    Great, Thank you.

    With people flocking into Aus, my guess is that one should look at family units?

    These people will also need jobs. What does the business property market look like? Industrial, Retail & Commercial.

    Between the two, Residential And Business property which is the better to look at return and cost wise.
  16. KateMelb

    KateMelb New Member

    Sorry, I'm a residential investor only and can't comment on the business/commercial sector, except to say that while annual rental returns may be higher with commercial property, annual capital growth is generally higher with residential property. Which sector you invest in depends on your individual investment strategy.
    Last edited: May 1, 2010
  17. siewy

    siewy New Member

    Prices cooling but only in short term

    i reckon prices are cooling off but only for the short term. in the long term i still think australia is a safe bet if you pick the right growth areas. Brisbane is looking up in my opinion, I should have bought property in Perth 10 years ago.
  18. Damian George

    Damian George New Member

    Hi Dave,

    Tend to agree with the view of Australian Property Market being a long term investment, but for now it looks a little over done and a good tell to sell.

    The service sector in oz is falling, the banking system is getting involved overseas to generate returns (see what happened to RBS when they spread their wings) and the commodity sector could be at risk if the global economy gets another cold.


  19. EPI_Den

    EPI_Den New Member

    Hi Dave and Damien,

    I think the Australian market has softened somewhat in the second half of this year; first because of the threat of interest rate rises and now because it's actually happened (along with the bank's additional slug on top of it).

    Nevertheless it's worth noting that the market is relatively stable and with demand still relatively high I wouldn't expect to see the bottom fall out of the market. Besides, the amazing growth that we've seen in places like Melbourne (25% in some areas in two years) wasn't sustainable.

    Possibly it's a good time to start looking around?

  20. mortagage

    mortagage New Member

    Interesting thread, I didn't realise that Australia was facing a housing shortage, I think it's a great place to invest though, particularly from the info given here.

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