When researching your purchase in Australia it is important to be aware of the economic reasons that make it a profitable investment arena. Below are some key factors to consider.
Property prices are generally high in relation to income levels in Australia, creating a great demand for rental properties. In fact this demand is so high in some major cities that rental prices are firmly set to increase, making any purchase into a buy-to-let property market potentially profitable. While the population grows and incomes rise, the demand for housing now outpaces supply, causing prices to continue rising.
Australia still has certain areas offering great investment opportunity. For example, in 2006 Perth property prices rose by between 36.6% and a staggering 42% and commercial properties in cities such as Brisbane and Perth are also currently offering many excellent returns on investment.
"Pure investment" strategies are viable options in many areas, enabling you to purchase off-plan property in Australia at the best possible prices. Investors purchasing as early as possible with a minimum "money-down" payment and then selling prior to completion are gaining substantial profits.
Australia’s cost-competitiveness has led to a growing number of foreign companies using Australia as a headquarters for their Asian operations. Between January 2002 and March 2003, 54 foreign companies established or relocated their operating centres in Australia, making it one of the most successful countries in the world in attracting such investment. Today Australia consistently emerges as a low cost base amongst developed nations.
Currency exchange rates against euros, dollars and sterling are very favourable in Australia today, making property investment an attractive option to foreign investors who avoid losing vast amounts of money in their exchange transactions against the Australian dollar. In addition, foreign purchasers are generally able to buy much more for their money than “back home”.
The cost of living in large cities such as Melbourne, Adelaide, Brisbane and Perth is dramatically less than that of the world's most expensive cities. At the same time, Australia's major cities are all ranked among the world's top 30 cities in terms of quality of life.
Australia’s strong economic growth rates are higher than in most OECD countries including the US and UK. Currently the country’s GDP is higher than that of the UK, Germany and France for example. There is a low degree of risk in the Australian economy while it boasts consistently strong GDP growth, stable interest rates, rising exchange rates, relatively high levels of employment and a low rate of inflation.
In the main cities unemployment is relatively low and on average the national unemployment figures stand at around 5%. The country receives many applications each year from those wishing to immigrate to Australia and enjoy the high standard of living and general opportunities the country has to offer.
Repayment mortgages are available to purchase property in Australia, covering 75-80% of the valuation or purchase price (whichever is lower) and they are available for a period of between 5 and 30 years. Interest only mortgages are widely available in Australia and are on offer for 5 or even 10 year periods.
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