Singapore or Sydney?
Both are world-class cities for both residential and commercial property investment. But in the world of real estate not all things are created equal. Statistics have revealed that Sydney ranks as the second most favoured city in the Asia Pacific area for commercial real estate, placing it above Singapore. The increased activity in real estate investment in Sydney is largely due to a number of attractive factors.
Business tenants choose to stay longer in Australia
Lease tenures are longer in Australia, from 7 years up to 10 as compared to other Asian markets where they are much shorter.
Sydney’s impressive commercial real estate rental yields
The rate of rental return in Singapore is less than Sydney. According to data released, the average yield expected in Sydney stands at an attractive 6% as compared to 3.5% expected in Singapore.
Softening in the Singapore property investment market
According to a report by the Royal Institution of Chartered Surveyors (RICS) commercial tenant demand in Singapore has seen a sharp decline in the first quarter of 2016 that has put the brakes on investment with foreign buyers looking elsewhere for more positive cash flow opportunities. The growth in supply outstrips demand placing a downward pressure on rental yields. This situation presents a challenge to international investors who also struggle to rent their investments due to a sluggish market.
Maximize on long term taxation benefits
Investment in Australian property forces you to save and offers long term taxation benefits. Negative gearing (annual taxable loss) offers Australian expats a golden opportunity to benefit from passive income while out of the country.
Another favourable offered to Aussie expats thanks to low interest rates is the accumulation of tax credits that can be used against future Australian earnings or as capital gains tax when you decide to sell.
The cash flow potential of commercial property investment in Australia makes this form of investment a highly favourable one for smart investors. Capitalize on commercial real estate in Sydney with factors such as higher returns on investment and longer tenant leases.
At Wise Guru we understand the challenges of investing in the Australian property market when you’re not on Australian soil. That is why we provide expats with in-depth local knowledge and trends on commercial property investment. Looking for growth potential in your investment portfolio or positive cash flow? Get in touch with our expert agents today. We also have offices in Australia.