Australian real estate has been one of the best investments for international investors in recent years and recent figures coming out of Sydney show why. Australia recently went through its own housing boom, and, although things have slowed down a bit, prices and demand remain strong according to news reports in the Sydney Morning Herald (www.smh.com.au).
The housing boom in Sydney peaked a couple of years ago, but prices still remain strong, particularly for higher end housing. One area that has seen significant growth as a result is rental property. A report detailed in the Sydney Morning Herald notes that New South Wales, the state in which Sydney is located, has a current housing shortage of 30,000 units. This means that their will continue to be capital appreciation for years to come.
The Australia Reserve Bank recently announced a .25 percent hike in interest rates, which will not help the current need for more housing. With mortgages at higher rates, builders are less inclined to invest in new property. International investors, though, who can take advantage of favourable exchange rates, have a clear advantage when it comes to buying property.
A report from the Housing Industry Association-Commonwealth Bank notes that housing affordability in Australia has declined over the past year. While this is bad news for first time home buyers and those on the lower to middle end of the housing market, it is good news for sellers, international investors and those looking for capital appreciation. Typically, international real estate investors are looking for higher end property and rental units for investment income. The high prices and low availability in the market may mean that this segment of the market will continue to see gains in the years ahead
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