Investing in Aus Property

[hDt]

hi,

i am planning to make the move the Aus in the coming years, not sure when. i'd like to start investing though in some kind of property to 1) have something when i get there, and 2) getting a rand-hedged asset

any pointers from anyone? where are the booms / where will booms continue / where to get proper Aus property investment info / any luck to get information like bank repo's, auctions etc... /

is it even possible for SA citizen not living in Aus to buy property - how would that work etc etc...

thanks

[kangaroo]

Hi there hDt

Yes, a foreigner may buy property in Australia, but there are certain conditions as set out by the Foreign Investment Review Board (FIRB) The website has a very helpful Q&A section that outlines all requirements and details.

An excellent magazine is the Australian Property Investor My mom subscribes to it and it has a wealth of info about property in Oz. Apart from well-researched articles, they have useful breakdowns each month of average property prices per state and city, according to suburb.

Hope it helps a bit!

Liza

[ottg]

Hi

In general there are very few repossesed properties in Aus.

Note that Aus property auctions are different from what we know in RSA. Most Aus properties goes on an auction even after an firm offer is on the table. This is the most common way of selling in Aus.

When a property is on the market you register your interrest, then give a firm offer to purchase and then a auction may still follow to obtain the highest price in the market. Many properties are purchased without even viewing by the prospect buyer. If properties are correctly priced it is sold within 2-3 weeks from appearing on the market.

WA has the 2nd highest house prices in Aus with a median price of $450,000. If you are new to the Aus property market I can strongly recommend the following book below. It covers all investment aspects. Note in Aus the wealth is in the land not the house. The biggest advantage if you pay tax (even salaried) in Aus is that all interrest paid on investment property is tax deductable.

Book: More wealth from residential property - Jan Somers

http://www.somersoft.com.au/

The best Investment forum for questions is:

http://www.somersoft.com/forums/

Real estate information:

http://www.reiaustralia.com.au/

Property guru Craig Turnbull's website:

http://www.iaspire.com.au/

Agents: (depends what location)

http://www.ljhooker.com.au/

http://www.acton.com.au

http://www.realestate.com.au/

Hope it helps!

[WannaB Ozzie]

hDt, artikel in gister se Sidney Morning Herald:

Housing market to 'soften further' in 07

January 3, 2007 - 5:54PM

The housing market in Australia's eastern states is expected to slip further behind this year amid slowing demand and declining home loan affordability, according to a new report.

The markets in Darwin and south-east Queensland are likely to experience the most growth, while Sydney, Melbourne and Adelaide should see another subdued year, the Real Estate Institute of Australia (REIA) report said.

The report predicts any price growth will be limited because of slowing demand stemming from deteriorating home loan affordability and last year's three interest rate rises.

"A slowing in demand for property, despite positive population growth in all states and territories, will limit price growth in 2007," the report said.

The REIA also warned that Perth's housing market, which led the country in 2006, will have limited growth this year.

But with softer house prices and a stronger desire for rentals, investors should be drawn to property and re-stimulate values.

The report predicted that house prices in Sydney and Adelaide will remain flat in 2007.

Property prices in Melbourne, Brisbane and Canberra, which had some modest growth last year, have already started to slow, and are not expected to gain momentum in 2007.

Hobart should follow suit, but Queensland, particularly the south-east, may maintain positive growth because of interstate migration and strong commodities prices, the REIA said.

Even in Perth, where prices surged 38.7 per cent compared with Sydney's 0.6 per cent in 2006, there is evidence that the boom is slowing, the report said.

Western Australia is being held back by skilled labour shortages and higher interest rates, and real estate sales are expected to slow in 2007.

But with overseas migration, along with low unemployment, Perth is likely to have a stronger market than other cities.

In Darwin there is expected to be strong price growth this year on the back of the commodities boom and demand for quality modern property.

The report paints a grim picture for renters across the country, who struggled through 2006.

Rents increased by about 9.8 per cent on average in the year to September 2006, with demand for rental properties outstripping supply in every capital city.

"They are likely to continue to rise across the country during 2007, particularly in Sydney which has been slower to respond to the tight vacancy rates than other locations," the report said.

On the upside, Sydney will provide attractive opportunities for long-term property investment.

But for renters in the 25 to 35 year-old age group, higher rents alongside credit card debt, HECS commitments, child care and fuel, are expected to be obstacles to saving for a home deposit, the REIA said.

Home loan affordability has become a major concern following the three interest rate rises in 2006, the report said.

In the commercial property market the tightening in vacancy rates is expected to continue, but low unemployment should support a healthy retail property market in 2007.

Likewise, the industrial property market, boosted by economic growth and superannuation changes, should be strong in 2007.

The report also said the impact of the drought was expected to have "a negative multiplier effect which will be particularly evident in rural and regional towns and cities, and may have a flow-on effect to the capitals".

© 2007 AAP

[hDt]

thanks guys for the info, will look into all the links..

[Springbok]

Perth property boom ends, Sydney sags

In the December quarter house price growth in Perth slowed to just 1.7% - with house prices in the city now growing at the forth slowest capital city after more than two years in pole-position. In Sydney median house prices fell 1% in the quarter, reversing slight improvements during 2006 and delivering an annual growth rate of -0.1%...

DECEMBER QTR KEY FIGURES

[starfish]

Hi all

Can anyone give me (or point me in the right direction) an idea of the yields on rental property in Australia ? I know that this is a broad question, and will vary from city to city, however I just want to get an idea. Flats and/or houses or an average will be fine.

Also, how does being a landlord in Aus compare with being one here in S.A. ? For example, is there more red tape, are there stricter laws protecting tenants etc ?

Regards,

Scott

[ottg]

Hi

The "Australian Property Investor" magazine refered to has a "Visit our Advertiser" link on the website. There you will find links for most professionals out in the field. They will be eager to advice on market analysis, property management and the like! In general the lease contract is in favour of the tennant and their bond is well protected by law.

Be careful for free advice, if you don't pay for it, it is most likely not well researched.....and just another opinion... like mine. There are well researched papers available similar to the "Rhode Report" of South Africa. It will safe you a bundle. Get 2-3 reports and you will be well informed!

Most financing for investment properties has been structured for interrest payments only. Your rent covers approx 50% of interrest payable. The short fall is tax deductable if you get a tax variation note based on prepaid interrest made. Depending on your tax credits and tax payable you can get 100% deductions. What is your yield then ...infinitive?

Be careful to look at the flavor of the month when considering area. In general look for location, location, location. The closer to the city the more expensive the land. Some areas which offers the best growth is usually areas that were stagnant previously for obvious reasons. In general property is fault tolerant.

Hope it helps!

[ottg]

Hi

I though to share my Investment Cycle with you!!

1. The Investment Cycles clock

Here is a 150-years old historic economy clock principal that says it all:

2. Property Fundamental analysis:

Subscribe to the following Reports: Do search on http://au.yahoo.com/

• Residex – good and credible property forecasts http://www.residex.com.au/

• REIA - get archived information from their web site or subscribe to get the latest information http://www.reiaustralia.com.au/

• ANZ Bank – a good half yearly quarterly property report

• Australian Bureau of Statistics - various reports predicting the property cycle.

• BIS Schrapnel – economic forecasts with low real value but take note.

http://www.bis.com.au/reports/economic_out...&OVMTC=advanced

3. Factors to consider in your cyclic analysis:

a. Supply

b. Demand

c. Household sizes - divorse rate, single families, quantity of first time home buyers

d. Birth rates & Population increase

e. Migration –Interstate (see changes, water change, tree change)

f. Immigration – skilled people bring (have access to) MONEY

g. Rental vacancy rates

h. Interest rates

i. Investor activity

j. Economic influences & political events & perceptions and realities

k. “Ready” Land shortage

4. General rules you should consider:

a. Each country and national state will have its own property investment cycle. This is similar to different market segments within the stock markets because each listed company is affected differently by the economy and managed differently by their Board.

b. The general crowd/public is risk adverse and is influenced by the hype in the media. They will always wait till it is “safe” and miss the upturn and missing out on the growth.

c. See what the majority of people are thinking i.e market sentiment (available from newspapers) and then consider the opposite as to where the truth may be found.

d. The crowd will have a perception and the perception will lag the reality. Therefore always late.

e. You will never get your timing 100% correct. Property is fault tolerant, so don’t worry. Don’t always wait for cycles just buy well.

f. Think long term. Cycles are 7-10 years because of new generations entering the markets.

g. All markets are cyclic and therefore your investment must not remain static

DISCLAIMER: All information is provided as general information only

Hope it helps!!

Edited February 18, 2007 by ottg

[starfish]

Many thanks for the detailed response ottq.

Scott

[starfish]

Further to the original topic, here are two interesting articles from the Melbourne Age:

One rent problem: prices, prices, prices

Homes further out of reach for new buyers

Regards,

Scott

[ottg]

This article and similar ones for Sydney gives a clear indication where we are NOW on the investment cycle!

Somewhere between 3 - 6 hrs!! More closer to 3 o'clock!! What do you think!

Regards

[starfish]

In S.A., I would say we are currently between 1 - 3 o'clock. We had a few interest rate hikes last year. Property prices are not increasing at the same rate is in the previous 3 years. The JSE Allshare Index is still reaching record highs.