WHAT DO THE SUPER-RICH HAVE IN COMMON? In this article, we explore some similarities among the wealthy.
Two things. A preference for property investment and Australia. Research has shown that property remains a preferred investment for the super-rich and that more millionaires are shifting their focus Down Under 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.
Opportunity in AFFORDABILITY
The value of the Australian currency has hit a downturn in recent times. From a previous high of RM3.43:A$1, the dollar dropped to its most recent low of RM2.89: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 more than RM380,000. 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.
Opportunity in the Staggering POPULATION GROWTH: 1 person per 86 seconds
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.
Opportunity in RETURNS
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.
Thinking of your next Austalia Property Investment?
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 shows that Melbourne has outdone Singapore, Sydney and Tokyo as the best prospect for investment and development. Here’s why:
- Fastest-growing population in Australia
- Home to some of the best universities in the world
- Annual price growth driven by undersupply in dwellings vs population growth
- Good prospects for rental growth due to tight vacancy rates of 1.7%
Australia, particularly Melbourne, has proven naysaying pundits wrong so many tines in the past. If you’re interested in learning a bit more about the property market, feel free to register your interest below. Or call us at 03-2162 2260 for more info.