Thinking of putting your cash into overseas property investment, but feeling a bit wary about it? Naturally, a big decision like this needs to be examined with much care and thought.
But let us catch your attention for a moment and show you how investing in overseas property can help you kill two birds with one stone.
What?
Yup – It is possible! We’ve cracked the code on a profitable investment plan that allows you to give your child a world-class Australian education for FREE! All you need to do is bank your money on Australian Property Investment. Still don’t follow?
Let’s break down the investment returns so you can make an informed decision in Australia Property Investment.
First, we begin by putting things into perspective: by calculating the cost of tertiary education in Australia so you can have a better understanding of the returns you could make from your Australia Property Investment. Here, we look at the top three Australian cities for university students.
1. Melbourne
One of the world’s most liveable cities also happens to be one of Australia’s top cities for students. With 8 globally-recognised universities and a variety of lifestyle and F&B facilities and outlets, Melbourne has something for everyone (not just students). The well-known universities include University of Melbourne, Monash University and RMIT University.
Median cost of a Bachelor’s Degree in Melbourne (Annual Fees): AUD39,000 (approx. MYR117,000)
2. Brisbane
Considered the best city in Australia for cost-savvy students to pursue higher education, Brisbane hosts several world-class universities, specialising in subjects from Engineering, Accounting and IT to Medicine. As Australia’s most biodiverse city, it is also a world leader in sustainability. You can have your child study at the University of Queensland and Queensland University of Technology (QUT).
Median cost of a Bachelor’s Degree in Brisbane (Annual Fees): AUD37,000 (approx. MYR111,000)
3. Sydney
Other than how Instagrammable the city is, Sydney is said to be one of the most exciting places to pursue tertiary education. In fact, it is ranked first in Australia for graduate employability. So, anyone wants to extend their stay in Australia?
Opt to study in University of New South Wales (UNSW), University of Sydney, University of Technology, Sydney.
Median cost of Bachelor’s Degree in Sydney (Annual Fees): AUD40,500 (approx. MYR121,500)
Now that you have in mind an approximate amount of what your returns should be (we are working backwards here — trust us, it’s easier to see the bigger picture that way), you can look at investing in property in a city of your choice. Some of you might have fond memories of the city for various reasons (visited, studied, have family etc..) and you’ve missed everything about Australia – the land of opportunities for us Asians.
The next thing to consider is that most Australian cities are facing a slight correction in property prices in the last few years with Sydney being hit the worst, followed by Melbourne and Brisbane (you might want to read this).
What does this mean for you?
Well, with property prices at a low, now would be the best time to secure a property, rent it out and wait for the market — and prices! — to pick up again (which it will, because the property market is a continuous cycle).
With the currency in your favour, this is one of the best times to buy — not only are property prices low, but the currency is 15% lower than where it was last year (RM3.4), having dropped to RM2.9 now. A long time ago (in 1995), the Aussie dollar was only worth RM2! For parents planning to send their kids to Australia, now is the best time to hedge the currency and invest in the AUD.
Moving on to property appreciation and rental yield. Based on data from Expatisan and Real Estate Australia, let’s compare the returns on investment between the three Australian cities and Kuala Lumpur.
| City | Melbourne | Sydney | Brisbane | Kuala Lumpur (Malaysia) |
| Price of Property (AUD) | 500,000 | 500,000 | 500,000 | 500,000 |
| Estimated Monthly Rental Rates (AUD) | 2,200 | 3,000 | 2,000 | 1,100 |
| Property Appreciation (AUD – approximately 5% per annum) | 25,000 | 25,000 | 25,000 | 25,000 |
| Vacancy rate* | 1.8% | 3.4% | 2.6% | 40% |
*SQM ResearchApril, 2019 & CBRE – WTW
At a glance, you can see the potential of growing your investment in Australia compared to Kuala Lumpur. There’s an overhang of residential property in Kuala Lumpur, so house prices are not expected to increase by much in the near future, this in addition to that the higher percentage of vacancy rates in KL city centre. Now let’s take this a step further to see how much your Australian Property Investment would be in three years (excluding management fees, etc.) and how it could fund your child’s education:
1. Melbourne:(Monthly rental x 12 x 3) + (Property appreciation x 3) = Total returns after selling off the property (AUD2,200 x 12 x 3) + (AUD25,000 x 3) = AUD 154,200 Cost of tertiary education (based on median cost stated above): AUD117,000 |
2. Sydney:(Monthly rental x 12 x 3) + (Property appreciation x 3) = Total returns after selling off the property (AUD3,000 x 12 x 3) + (AUD25,000 x 3) = AUD 183,000 Cost of tertiary education (based on median cost stated above): AUD121,500 |
3. Brisbane:(Monthly rental x 12 x 3) + (Property appreciation x 3) = Total returns after selling off the property (AUD2,000 x 12 x 3) + (AUD25,000 x 3) = AUD 147,000 Cost of tertiary education (based on median cost stated above): AUD111,000 |
4. Kuala Lumpur:(Monthly rental x 12 x 3) + (Property appreciation x 3) = Total returns after selling off the property (AUD1,100 x 12 x 3) + (AUD25,000 x 3) = AUD 114,600 Cost of tertiary education (based on median cost stated above): barely scraping it to get your child into a university in Brisbane. |
Still not convinced? Check this out and read below for more pointers on why you should invest in a property in Australia:
- Unlike Malaysia where there are leasehold and freehold titles for properties, Australian property laws only has freehold titles and therefore, you don’t have to worry..
- In Malaysia, most would have to furnish their homes or even renovate them. In Australia, there is this thing called the Full Turn-Key Package, which we suppose means that when you turn the key into your home, it is more or less liveable without the need to rewire, re-pipe or to knock anything into place. It comes equipped with rolling blinds, stone bench tops for kitchens and bathrooms (OMG yes, this feels like walking into a hotel suite), carpets and landscaping (if you purchase land & house).
- Rental is tabulated by week and not by month. What is the difference, you ask. Let’s (again), do a simple calculation. If you are renting your home for AUD100 a week and there are usually 4 weeks in a month, therefore you are renting it at roughly AUD400 a month:
| Monthly rental (12 months in a year): AUD 400 x 12 = AUD 48,000
Weekly rental (52 weeks in a year): AUD 100 x 52 = AUD 52,000 Crikey, what just happened? That’s the magic of weekly rental, mate! |
If you’re convinced and would like to know more, we advise that you speak to someone who can help you manage and understand the whole process of investing in Australian property. Being interested in investing is one thing, but the actual process of investing — where to invest, type of property, CBD vs suburb, etc — is an entirely different ballgame.
At CSI PROP, we take you on a seamless investment journey. If you have further questions or are in need of any assistance, drop your contact details in the form below! You could also contact us for a copy of our investment guide, ‘Investing Intelligently 2019/2020’.
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References:
- https://www.realestate.com.au/australian-property-market/property-report-january-2019/
- https://www.google.com.my/amp/s/www.easyuni.my/amp/australia/
- https://voiz.asia/en/32707
- https://studyabroad.shiksha.com/australia/universities
- https://studentcities.com.au/
- https://studyabroad.shiksha.com/australia/universities
- https://loanstreet.com.my/learning-centre/refinancing-your-home-in-malaysia-to-buy-property-in-australia
Great post i must say and thanks for the information.I appreciate your post and look forward to more.