Why You Should Invest in the Australian Housing Market
Why You Should Invest in the Australian Housing Market
Are you in the real estate game and considering your next move? Go where opportunity awaits. It’s time to consider the Australian housing market. Here’s why:
Real estate can be a smart place to put your money. Finding a market that can offer growth or stay stable and secure can get you the most bang for your buck.
There are rules surrounding the purchase of Australian real estate. It can be a challenge to buy a property here if you are a foreign investor, but depending on which country you’re from, it can vary.
However, it’s worth the trouble to go through the process to purchase real estate in this country. You can stay assured that your money will be in a reliable spot. Foreign investors in Australian real estate have access to the great mortgage financing options in the country.
Australia has become incredibly popular for overseas investors. It’s also popular with those looking for a quick return on their investment. The Australian housing market has a steady record of stable prices.
We’ve done the research for you and created the ultimate guide on why you should buy property in Australia:
The Australian Housing Market Is a Stable One
Australia’s property market has a proven record of stability. There is a massive difference between Australia and other real estate markets. In Australia, almost 70 percent of households are actually homeowners.
Because of this, the speculation percentages go much further down. There is a consistent undersupply of housing in many of Australia’s capital cities as well. When it comes to the Australian housing market, you’ll find many options with little competition.
Australia offers responsible lending legislation. They also offer economic management through the APRA (Australian Prudential Regulation Authority). These services make for a seamless process and can reduce the risk of asset prices suddenly skyrocketing.
In an otherwise roller coaster market, Australia has never had their real estate prices fall more than 20 percent in a single year. This will give you peace of mind that your money will likely stay in a stable market.
When considering the purchase of real estate, check the behavior of other markets. Hong Kong and the USA have consistently suffered major real estate crashes that left real estate investors with major losses.
These crashes occurred because of significant speculation from foreign investors. Price bubbles were also fueled by debt. In Australia, investors have a smaller impact on the sales market.
That’s because the majority of the housing market is already occupied by homeowners. Even in 2007-2009 when the Global Financial Crisis occurred, the Australian real estate property values went up. Lessen your risk and increase your return using the Australian housing market.
Opportunity for Growth
Australian properties have shown a consistent growth in capital gains over the past one hundred years. Many of Australian real estate ventures repeatedly double every seven to 10 years in value.
Australia’s major cities are booming, and real estate is often in short demand. Once you can find a property worth investing in, you’ll see endless opportunities for sales, flips, and rentals. While there is a cap on housing prices, this offers steady affordability and consistent rentals for any real estate investor.
The Australian housing market prices have risen to meet the market’s ability to pay for the housing.
It’s an Easy Process
The Australian housing market is great for investors because it’s an easy process. Many foreign countries have restrictive investment laws. These laws paired with banking regulations can make it tricky for investors.
Australia is a dream for real estate gurus because you don’t even need to set up a company in Australia to buy properties. You also don’t have to buy with or from a citizen.
Furthermore, Australia wants investors. Government approval for foreign buyers is relatively simple and inexpensive. Getting financing for your real estate venture is easy in the Australian housing market.
Just find specialist mortgage brokers who are pros with investing.
The strong protection legislation in Australia will ensure that your transaction is safe and sound. Australia is good for real estate investors because there is a minimal political impact.
The market also minimizes economic, social and national security instability.
The Australian housing market is much more reliable than the markets in China, England or the U.S. Though buying in Australia can be a long process, it’s worth the effort. Make sure you have the proper information and right people working for you.
You’ll need agents, accountants and mortgage brokers that are familiar with the market in Australia.
Australia Is the Best Place to Live
Australia is a beautiful country with breath taking natural beauty and cultural diversity. It’s a wonderful place to live, visit, and invest in real estate property. Queensland is a great place to purchase property as it is famous for its amazing beaches and reefs.
A place like Queensland would be especially wonderful if you’d like to rent your property out as a vacation home. Victoria is another stunning city, with coastlines that stretch all the way down to South Australia.
The Northern Territory is fantastic as well. It’s known for its distinctive outback experience that many renters and buyers are drawn to. The New South Wales portion of Australia has the beautiful Blue Mountains and a stunning coast. It’s also close to Sydney.
Go Down Under
Australia is a safe space for anyone looking to purchase a property. Whether you are a local citizen, or you are a foreign investor, consider this country. It’s a stable market with great opportunities for growth.
In 2018, there are few markets as reliable as those in Australia. It’s a fantastic place to live, visit, and buy real estate in. It can be an easy process if you’ve assembled the right information and gathered a reliable team.
For more tips, tricks and advice for real estate investments, contact us today! We are here to help!
Why Real Estate Investing in Australia is a Good Choice
With such a consistent market, real estate investing in Australia is a great opportunity. Click here to discover why you should invest in Australian property.
Want to be part of the real estate investors that earned $51.2 billion in gross capital gains in 2015? Then you should think about real estate investing in Australia.
From 2003 to 2009, the 12-month housing credit growth was 14.6 percent. Real estate investing in Australia gives investors access to a 50 percent deduction on capital gains – along with other tax incentives most countries don’t have.
If these reasons aren’t enough to get you investing, read on to find out more of the benefits and how to start your investment journey.
Benefits of Real Estate Investing in Australia
Real estate is one of the more stable investing strategies out there, even more so when it comes to Australia. While the real estate market is consistent and growing, there are also generous tax laws that go along with the strong economy.
Investment Performance is Consistent
Australia’s GDP is expected to grow at about three percent over the next few years. While the GDP is growing, Melbourne is experiencing a population growth of 1.1 percent, which is faster than Sydney.
This means Melbourne households are expected to increase by 20,975 by 2021 and someone has to purchase that real estate, why not you?
Since the investment performance is so consistent all across Australia, returns have been high as well. In Sydney, housing prices increased by 14 percent. Property prices are only expected to rise by 2020, with prices going up by 10 percent, according to finder.com.au money expert.
Generous Tax Laws
Real estate investing in Australia motivates people to buy as they offer a 50 percent deduction on negative gearing and capital gains. There are many other tax deductions to take advantage of when it comes to investment properties.
If you purchase furniture for short-term rentals, you can claim these at four percent. Furthermore, the depreciation of this furniture, fixtures, and fittings in your investment property can be deducted as well.
When you travel to inspect your property, make sure to deduct these travel costs. The difference between the income and outgoing can be claimed as well.
The interest on your investment property is completely claimable, meaning you can claim 100% of the interest on your taxes.
If you decide to relocate for real estate investing in Australia, make sure to take advantage of these tax credits because this will save you money in your first year living in the country.
If you do not move, tax credits are available to offset capital gains if you decide to sell that property in the future.
By the time 2030 comes around, there will be a demand for an additional 620,000 households. The higher the demand – the higher the property prices, so now is the time to buy your real estate investment property.
Many of the demand will be near large cities, such as Sydney and Melbourne. Capital gains in Melbourne are expected to grow at 7.4 percent while those in Sydney they are expected to grow at 6 percent.
Throughout the Global Financial Crisis, Australia’s banking and economy systems have remained strong. The prices of real estate have remained stable while the demand for rental properties remains high.
Residential Tenancy Act
The Residential Tenancy Act is designed to be a neutral agreement between landlord and tenant. The act spells out what happens if the tenant doesn’t pay rent, but it also sets limits on how much rent can be per week. Each state and territory has its own set of rules so it is important to be familiar with these when renting out your investment property.
Australia is experiencing a 1.4 percent annual change over the past year. Melbourne has the largest population with about 75 percent of the state’s citizens living there. As the second largest city in Australia, Melbourne is growing at about 120,000 per year.
If Melbourne keeps growing at this rate, it will pass Sydney within the next few decades.
Growth rates in New South Wales, Queensland, and ACT ranged from 1.5 percent to 1.8 percent – making these areas another hot spot for real estate investing in Australia.
How to Invest
The first things you need to do are research, plan, and prepare. Find out what type of property will bring in the biggest return, what area you want to invest in, and local laws for property owners.
Set a Budget
Make sure to stay within your budget. The goal is to make money, not lose it, so set a budget and stick with it. Figure out how much you can afford to borrow and don’t go over that number. Remember to be conservative with your numbers.
Make a Timeline
Plan out your timeline for purchasing your investment property. How long of a loan do you want? When do you need to finalize your loan by? Are you going to find an expert to find your investment property? The latter is highly recommended because it will make the process easier.
Check out the Tax System
While the tax system is favorable for investors, you will most likely need to hire someone to do your taxes to get the most out of these benefits. Keep track of all your expenses, keep your receipts, and read about deductions so you can be prepared.
The government provides incentives for real estate investing in Australia, which come in the form of grants. The grants vary with the state or territory you are purchasing real estate in and paperwork must be submitted properly, so it is a good idea to consult an expert with this process.
Be a Part of The Boom
Real estate investing in Australia is expected to grow because of population, a stable economy, and generous tax benefits. Be a part of this growth by purchasing your investment property. Call us (CLICK HERE?) to sign up for an investment workshop.
Why You Should Buy a Home and Land Package
There are many benefits of buying a home and land package. Here’s a list of some of the major reasons you should consider a package of this type.
When you’re getting ready to purchase a home, you have a lot of things to consider. Where do you want to live? How big do you want your house and/or yard to be?
There are various other considerations that you may want to mull over, but when it’s all said and done, you just want to find the house of your dreams and buy it and be done. Unfortunately, things just don’t work that way for most of us. Instead, you’ll be faced with decisions both financial and emotional that will make an impact on how you purchase your home.
That’s why lenders and builders have joined forces to offer what’s known as a home and land package. It makes the buying process a little less complicated and saves you money at the same time. Win, win, right?
In this article, we’re discussing why you should consider this method of purchase for your next home. Keep reading to learn more.
Buying a home and land package is similar to financing for a house. In this concept, you’re both purchasing the land that your house will sit on and financing a construction loan to build the house at the same time.
Buying the land involves a standard real estate transaction that offers a regular mortgage. The construction loan is drawn upon in agreed amounts by you and the lender for your builder to construct the home. And, you only pay interest on the money that you use at each stage of the building process.
It’s a pretty terrific way to combine the purchasing process so that you’re able to accommodate your wants and needs while building your home where suitable. There are a few other reasons why you should buy a home and land package, too.
Simplify the Buying Process
If you’re already considering purchasing a piece of land to build a home on, then you might as well consider a home and land package. This way, you’re buying everything you need in one place with the added benefit of selecting a piece of land and a builder.
This is an efficient way of lending for the banks because they can finance both the house and land at the same time.
Choose Your Location and Design
When you’re working with a land developer you’ll have more options for the site and location of your home. You can choose which direction the windows face and how large or small the home will be, depending on the lot size, of course. Create the home of your dreams with a home and land package that allows you to design where you’ll live.
You’ll have many options to choose from when selecting the design of your home from how many bedrooms, to square footage and kitchen layout.
The builder will have specific guidelines for you to follow so the home will be up to building codes and regulations. You can just choose your design and let the builder do the rest.
A brand new home comes with brand new everything else, too. You won’t have to worry about maintenance and repair costs that come with buying someone else’s house. A new home from the builder will also come with a warranty so if something goes wrong, you can get it fixed for free.
A newer home is also more eco-friendly in terms of energy savings and quality materials used to build it. This means lower cost to run and keep up overall.
Depreciation in a new home is actually a good thing for the tax benefits it provides.
Tax deductions can be claimed for depreciation assets of the home. These may include but are not limited to
construction costs of the building
It’s worth taking a look at, especially within the first year of purchasing your home. Tax deductions can save about $15,000 on a $250,000 home with $30,000 in assets.
It’s also worth mentioning that home values for home and land packages usually rise at a slower pace so you probably don’t want to think about selling right away. Wait for infrastructure and other economic drivers to be introduced to the neighborhood first. Take advantage of your tax benefits in the meantime.
When you’re building a new home with this method of purchase, you can also save money on stamp duty. This is because you are only paying for the value of the land component on your property. The house isn’t even there yet.
You can also claim variable depreciable assets as mentioned above. Consider how much money you can save on the cost of the building and the construction itself with these write-offs.
Landlords Attract Tenants
If you’re investing to rent out, a home and land package might be for you.
Renters like new homes and with a newer home you can also charge premium rent earning you a greater return on your investment. A new home can attract quality, long-term tenants that enjoy the conveniences of a home in a new neighborhood.
You can rest assured that your home and land purchase won’t go unused when you find your first tenant waiting to move in.
Buying Your Home and Land Package
Now that you know all the benefits of a home and land package, what’s holding you back? Get out there and get what you really want. It doesn’t have to be frustrating and scary.
All you have to do is a little bit of research and prepare yourself for each step of the way. Keep a list of the people that you need to be in contact with. And, make sure your finances are in tip-top shape.
When you’re ready to make a purchase or if you still have questions, contact us! We can help you figure out your options.
How to Buy Property with SMSF
If you’re wondering how to buy property with SMSF, then this article is just for you. Click here for a complete guide on how to buy property with SMSF.
Recent years have seen changes to how and when Australians can access their superannuation funds.
As of right now, you can access your super beginning at age 60, unless you were born before June of 1964.
These discussions on accessing super funds have also inspired talk of other ways to grow personal retirement funds.
Creating your own retirement fund or growing an employer-provided one can help you plan for financial freedom after you leave the workforce.
For many, an SMSF is the answer. It provides a solid source of income after retirement. SMSFs make it easier to control your retirement fund, giving you the freedom to grow it through investments, especially property.
But while property investment can help control your SMSF, it can also be a confusing process to navigate.
That’s why we’re breaking it down, and showing you exactly how to use your SMSF to invest in property. Keep reading to learn more.
What Is an SMSF?
An SMSF, or a Self Managed Super Fund, is a type of trust that provides benefits to its members once they retire.
A self-managed super fund can have between one and four members, all of whom receive benefits. Unlike other trusts, a super fund can be tailored to meet an individual’s, or small group’s, needs.
Every super fund needs a trustee, and there are two types of trustees that can create a super fund.
The first type is a corporate trustee. A corporation sets up this fund with the members usually being employees. In this type of fund, each member is considered a director.
The other type of trustee is an individual trustee. If there is more than one member in this type of fund, then there must be a minimum of at least two trustees.
In either type of self-managed super fund, the trustees and members make investment decisions that will affect the value of the fund.
Can You Buy Property with a Super Fund?
The short answer is yes, you can invest in property with your SMSF.
But there are regulations on how a super fund can be used, and steps you’ll need to take in order to use your fund to invest in property.
One of the biggest rules is that the property cannot become your personal residence or holiday home.
The point of a super fund is to provide retirement benefits to all members of the fund. If one of the members were to move into the home, no one else could gain any financial benefits.
Even if there is only one member in the fund, the purchase of a home for personal use does not provide a concrete return on investment.
Therefore, the only property you can invest in using a super fund is a property that will provide benefits back to the fund, such as renting to third-party tenants.
Why Would You Buy Property with a Super Fund?
Setting up a super fund for the sole purpose of buying property wouldn’t be particularly practical. It would add steps to the process of property investment without creating any real benefits.
But if you already have an SMSF in place, buying property can give you more control over your fund. It’s easier to manage than stocks or other investments and there’s less risk.
For many investors, real estate makes it simple to understand where their money goes, and what return you get on your investment.
Each month or week that you rent out your investment property, you will receive a tangible return.
There is also an added bonus for small businesses who choose to invest in property using an existing super fund.
Under superannuation law, small businesses can use a property purchased through a self managed super fund as a location to run their business.
If you want to launch a new business, or if your existing one is short on funds, it can be a great way to save money.
However, you can’t operate your small business rent-free out of a property purchased through an SMSF, even if you are the sole member. Instead, you’ll have to pay rent back to your super fund.
Borrowing Money with Your Super Fund
Several years ago, your only option for obtaining property with your self managed super fund would have been to purchase it outright.
However, you can now borrow money from your super fund, meaning you can purchase property outside your current price range. It’s a great option for those looking for a future investment.
It’s also great for those who recently established a super fund and can’t purchase a property outright.
Choosing Your Investment
Choosing to use your self managed super fund to invest in property should not be done lightly.
After all, your super fund is your future. Choosing the right investment can mean the difference between growing your retirement fund or losing it.
If you’re thinking about investing in property using your self managed super fund, do your homework. You’ll need to learn about the real estate market, particularly the market you plan to invest in.
You’ll also need to learn what it takes to manage a rental property, deal with tenants, file taxes as an owner, and more.
Start Growing Your SMSF Through Smart Property Investment Today.
Using your self managed super fund to invest in property is a great way to take control of your retirement fund and plan for future financial success.
But it isn’t without challenges.
That’s why we’ve created a free workshop that can help you learn what it takes to reach financial freedom. Contact us today to sign up for the workshop, or to learn more.