Ivan Tan The world is really not healthy economically, why would someone look at Australia as a potential property investment destination? In fact, why now?
Rich Harvey Australia has a very stable and resilient economy. Population growth is supplemented by high immigration policy – this gives rise to increasing demand for property.
Australia is fundamentally undersupplied in property in some capital cities and regions so it makes good sense to invest in a stable asset class that rises over time. Historically, median prices have doubled in most areas every ten years. Right now interest rates are at record lows so there is strong capital growth potential. Market is active and buoyant.
IT At this point what would be a good segment to look at in Australia? What’s the entry price and what’s the target result from the investment?
RH Residential property and commercial property are best segments.
For Sydney generally need at least A$600,000 to get into the market in more desirable areas. A good quality two bedroom apartment close to the harbor and the CBD will cost from A$750,000 up to A$1.5 million depending on size, location and views. We are also recommending Brisbane and Newcastle and selected regional towns in Queensland and NSW. Price point for some regional market is from $350,000.
End result – investors should be looking for both capital growth and yield. Typical gross rental yields are around 4% to 5%. Once interest rates start to rise, rental yields will rise, in the meantime, capital growth is the main focus for investors. We expect Sydney to rise another 7% in capital terms this calendar year.
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