By Ian Hosking-Richards
Australia has long been a favoured destination for foreign buyers and expatriates alike. A strong resource-driven economy, rising property values and a chronic housing shortage mean that investors are achieving great rental returns and capital growth. No wonder the 2010 Global Real Estate Trends Report identified Australia as the strongest housing market in the world in terms of property value growth. The global financial crisis has only strengthened Australia’s position as the destination of choice for international investors as other regions that used to attract investor interest have faltered as they struggle to cope with the fall out of the ailing global economy.
However, despite the obvious attractions of Australia as a great place to invest in property, many investors do not take full advantage of the opportunities that are on offer. So what are some of the common mistakes made by international investors?
By far the most common mistake made by investors is that they tend to purchase properties that they like, and in areas that they would chose to live in. There is a preference for blue chip suburbs that are recognised as prestige areas, and features such as water views and CBD locations are highly regarded. Whilst such properties are likely to achieve reasonable capital growth over time, they do not always offer particularly good value, and often rents are comparatively low and holding costs quite high. The savvy investor will always make an investment decision on the numbers, not for emotional reasons, and in the long run will be much better off financially as a consequence.
Another obstacle for investors in Australian property is lack of knowledge. They are often not familiar with Australia’s tax laws or breaks that are available to investors, and lack a clear strategy. Many potential investors surf the internet in the hope of educating themselves, but there is simply too much information and a lot of it is confusing and they do not know who is ‘right’, or who to trust. Some Australian developers do promote their projects by running overseas seminars in places like Hong Kong and Singapore, but the primary aim is to sell investors a particular project, rather than finding out more about the investor’s needs and sourcing an investment that would suit their individual circumstances and property goals.
There are many compelling reasons why international investors should consider Australia as a favourable option. Australia is considered a relatively safe place to invest by comparison to the rest of the world. It has stable government, a strong economy, low unemployment and strong immigration due to demand for skilled immigrants and the attractiveness of the Australian climate and lifestyle. However education is key. It is never possible to know everything before you start because there are some things that you will only learn by actually going through the process – those who want to know absolutely everything before they get started will procrastinate and never end up doing anything. But you will need to find someone who has already been successful in investing in Australia that you can trust to help you get started and advise you on the various property cycles, how to estimate cash flows, how to best structure your finances etc etc. Armed with this information and a positive attitude you are all set to join many other investors who have already started to secure their financial future by prudent investing in the strongest housing market in the world.
“Ian is one of the leading property advisers in Australia. It is fantastic to have Ian onboard as one of our property advisers. “Ian considers himself a serious property investor rather than a real estate agent, and has continued building his property portfolio. His portfolio is worth over $14 million.”
Shortly touring the world, please get in touch with us if you would like to arrange a no-obligation meeting with Ian on Australian property investing strategies and opportunities.”
To your investing success,