Two things. A preference for property investment and Australia. Research has shown that property remains a preferred investment for the super-rich. Research has also shown that more millionaires are shifting their focus to Australia to migrate and invest. Australian property appeals to investors due to familiarity, sentiment, and most importantly, the market’s resilience and strong capital growth.
Australian property values have grown rapidly over the past 20 years, surpassing countries like Hong Kong, Malaysia, Singapore and the US. According to the Bank of International Settlements (BIS), house prices surged 6556% since the ‘60s at an average of 8.1% annually. Even in spite of current housing market headwinds, data shows that 9 out of 10 properties have been sold on the market at a profit.
Source: Abelson & Chung, ABS, REIA, NAPIC, Data.gov.hk, URA, HM Land Registry, Economic Research Division, Federal Reserve Bank of St. Louis, & RBNZ. IMAGE: CSI PROP
The value of the Australian currency hit a downturn in the past couple of years. From a previous high of RM3.43:A$1, the dollar dropped to its most recent low of RM2.94:A$1. Hence, while an investment of RM100,000 in a Malaysian property would have grown in capital to approximately RM350,000 in 2018, an investment in an Australian property within the same period would have appreciated to RM380,000 or more. If you factored the gains made from currency appreciation, the value would be an estimated RM540,000 or more! With the exchange rate back at affordable levels, smart investors will do well to hedge the currency.
Source: fxtop.com, Image: CSI PROP
Australia’s population growth is the strongest in the developed world, surpassing even Malaysia! Australia’s rapid growth in house prices is driven by demand — a direct effect of the country’s burgeoning population growth rate of 1 person every 86 seconds. Latest statistics show the population grew by 395,100, in 2018 y-o-y, with nett overseas migration as the highest contributor. Migration and a skilled workforce will boost productivity and the overall GDP, which will continue to drive the need for housing, education and transportation.
Source: World Bank
With the current favourable exchange rate and growth in house values, investing in Australia provides rewarding returns. Beyond just returns, the vacancy rate is crucial. In KL, 1 out of 3 properties are vacant, hence the challenge in finding tenants. Below is a current comparison of the returns from a Malaysian property vs Australian property.
Of all the cities in the Asia Pacific region, one Australian city has been named the #1 city to invest in property: Melbourne. Recent data has shown that Melbourne outdone Singapore, Sydney and Tokyo as the best prospect for investment and development. Here’s why:
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This is an overseas investment. As overseas investments carry additional, financial, regulatory and legal risks, investors are advised to do the necessary checks as well as research on the investment beforehand. Investors are also advised to seek independent and qualified legal, financial and tax advisors. The Marketing Agents and Project Manager for themselves and for the vendors or lessors of this property whose agents they are, give notice that the particulars do not constitute, nor constitute any part of an offer or a contract. All statements, contained in these particulars as to this property are made without responsibility on the part of the Marketing Agents and Project Manager or vendors or lessors. All descriptions, dimensions, and other particulars are given in good faith and are believe to be correct but any intending purchasers or tenants should not rely on them as statements or representations of fact and must satisfy themselves by inspection or otherwise as to the correctness of each of them. The Marketing Agents and Project Manager shall not be held responsible for any negligence, consequential loss or damage arising from the use of this information. No person in the employment of the Marketing Agents and Project Manager has any authority to make or give any representation or warranty whatever in relation to this property
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