Real Estate And Property Development Investments In Australia

Posted by StevenHWicker on February 27th, 2019

There are many investment opportunities available in Australia, however, real estate and property development are the primary ones. Investing in Australian property is a low-risk, profitable option – which makes it attractive to many investors.

Australia is an outstanding country in terms of lifestyle and climate and it also offers many economic and political advantages for international property investors. There are profitable opportunities for city investment as well as in other current hotspots. The numerous advantages of investing in Australia’s real estate and property development sectors include:

Above average return on investments

Real Estate and Property Development Specialists has enjoyed consistent growth with an average annual rate of 7% per annum over the last 40 years. The doubling in value of properties every 7 to 10 years, compounded with their gearing leverage, means a phenomenal return oninvestment (ROI).Australia has a high capital returns of around 30% or more in key investment areas such as Melbourne, Sydney and the west coast.

Consistent investment performance

Australia’s GDP growth is expected to continue at a steady 2.5% to 3% due to it being one of the most diverse, advanced economies in the world.In addition, Australia has regulated investment markets that are transparent and low risk.

These factors make Australia an excellent investment location.

Melbourne’s population is averaging growth of 1.1% p.a. and is growing faster than Sydney (41,200 compared to 29,800). The number of households are forecast to increase by 20,975 in 2021. In the next decade, the average household size in Melbourne will fall from 2.6 to 2.25 persons.

Strong economic growth

Australia’s GDP is on a par with most European countries. However, its economic growth rates are higher than most OECD countries, including the US and UK. Australia also has a favourable sterling exchange rate (typically 1 GBP = 2.3 AU$), which allows you to buy more with your money in Australia.

Strong future demand

The increasing population and declining household size will generate demand for an additional 620,000 households in Melbourne before 2030. This expanding demand will continue to push property prices higher. The preference for the majority of the population is to move closer to the central infrastructure of major population centres or to be nearer to the beach. Demand for rental properties is high, with vacancies currently spiralling down to 1%.

Australian tax law offers generous tax benefits to property investors

Generous tax benefits are available for investors via negative gearing in Australia. Negative gearing is a form of financial leverage whereby an investor borrows money to acquire an income-producing asset. The gross income generated by the investment is less than the cost of owning and managing it, including depreciation and the interest charged on the loan. This loss is deductible against the investor’s other taxable income.

An investor typically enters into a negatively-geared investment expecting the tax benefits and/or the capital gain (when the investment is ultimately sold) to exceed the accumulated losses of holding it. The sale of investment properties is subject to capital gains tax (CGT), however local investors are eligible to reduce their gain by 50% if they have held the property for more than 12 months.

Ability to leverage

Leveraging to invest creates higher potential rates of return. Lenders provide finance for up to 100% of a property’s value, which is more than they are generally prepared to provide for other asset classes. Many Australian properties are viewed as low-risk investments with promising capital growth potential.

Properties won’t vanish

The most significant difference between property and shares over the last 78 years is that many of the properties upon which capital gain is calculated still exist today. On the other hand, many of the companies upon which the share-based returns were calculated on have vanished. Unlike shares, property is a tangible asset that won’t vanish as a result of poor management and/or obsolescence. Commercial property development specialist

Stable country

Australia is stable both economically and politically, making it a peaceful and secure lifestyle option.

Easy to recruit talented professionals

Australia’s lifestyle is an easy sell when recruiting and retaining talented professionals. Over half of Victoria’s population aged 15-64 has completed a post-secondary qualification, while over one-quarter have a university degree. Australia is ranked highly by expats as a destination for working abroad and as having talented, motivated and skilled professionals.

World-class healthcare

Australia truly has earned a world-class ranking in healthcare, receiving perfect scores in the EIU Index every year. Public and private hospital systems, community health services, ambulance and dental services all provide high-quality healthcare.

Clean green parks and fresh air

Australia is known for its enormous land size, amazing fresh air beaches, waterfalls, magnificent trees, manicured lawns and abundant wildlife in calm and tranquil green parks.

Quality schools and university education

Australia is home to some of the best schools and universities in the world. It has a first-class educational system that provides both academic and practical experiences. The majority of cities in Australia have the luxury of a large range of affordable educational institutions within walking distance.