Australian property is a popular destination for international investors looking for lower risk and consistent capital growth. We’ve outlined 5 top tips as a guide for international buyers looking to get started in investing in Australian residential property.
1. Yield or Capital Growth
Rental yields in Australia will tend to range between 3 – 5%, varying between the different locations. With continuing strong migration into Australia, capital growth potential remains strong in the right areas. It’s important to find the right balance between capital growth and rental yield, avoiding those properties that offer much higher yields and perform poorly in terms of capital growth, and those offering much lower yield that may create cash flow problems as interest rates rise.
2. Location, Location, Location!
Unlike most developed Asian and European countries, Australians do not prefer to live in small apartments right in the CBD, but prefer to reside 3 – 10kms outside of the city. Most investment-grade property is located in the larger Australian capital cities including Sydney, Brisbane, Melbourne and Perth. It’s important to look at the statistics when identifying the right city to invest in.
3. Low Rise vs. High Rise
Lower rise properties in Australia will typically come with much lower body corporate fees and maintenance costs. They will also typically offer higher land values associated with your property investment. Boutique apartment developments tend to offer better growth prospects than large high-rise developments in the city. Remember, it’s always important to find the right property in the right location.
4. Size Does Matter
While small apartments remain popular in larger cities such as London and New York, it’s important to identify larger, high quality apartments in Australian capital cities. These are typically constructed for owner-occupiers and will likely deliver much stronger capital growth over time. It’s important to consider who your tenant might be and what they will look for in a property.
5. Get to Know the Market
When investing in Australian capital cities, it’s important that you work with the right professional who can provide you with objective advice. Look for those who are not tied to any particular project or developer and can provide you with the right advice based on your own situation and needs. With this advice, you can develop a strong understanding of the local demographics, infrastructure and identify future growth areas.
To Your Property Investing Success!
Wise Guru is your expert adviser based here in Singapore for investment in Australian property. We work with expatriate clients to provide a complete, tailored concierge service for each of our clients from finding the right property based on your own situation, projecting and managing your cash flows, structuring and arranging your financing and working with a team of professional settlement agents and property managers to ensure your property is tenanted, saving you time and money.
Book your complimentary consultation with our team here.