Does anyone know if Australia market is investable?

Question

I found it’s very expensive to trade properties in the market, the property manager charges 13%+ and there’re thousands of council fees annually and the labour cost to maintain the property is huge. Does it mean that Australia is not a good market to do real estate investment?

Iris Cruz · Answer

@Lindsay Stewart

Hi Lindsay

Sorry for my late reply.

We were looking at investing in Indianapolis but we will leave things in hold due to COVID19.

Crazy times.

I will certainly reach out when things settle.

I hope you are well.

Thanks

Íris

Lindsay Stewart · Answer

@Iris Cruz

Hi Iris, great to hear you took the plunge!  Best of luck with your US investing!  It is very exciting.

Which area of the US are you targeting?

Reach out if you need any help at all :)

Cheers

Lindsay

Iris Cruz · Answer

@Sophia Zhang

Hi everyone

I’m in Australia and investing here.

We were suffering with the decision in where to invest next and just didn’t make sense to keep investing here.

Yes, equity can be strong but it definitely depends on where you buy. Some suburbs of Sydney and Melbourne didn’t see the same growth compared to the blue ship areas.

We are gearing up to invest in USA and we are very excited about the future (and exteemeteky nervous and anxious too) . Lol

Let me know if there is anything I can help from this side of the globe. I have some contacts that I can introduce 😃

Regards

Iris

Mike Lambert · Answer

I’m Australian and would never invest in Australian real estate. Cash flows are mostly negative and it’s the most unaffordable market in the world and it’s a bubble of epic proportions. It’s been like that for years. Unlike in the US, the bubble never popped due to the combination of 28 years of uninterrupted economic growth and ultra low interest rates, two things that normally don’t go hand in hand together. Add in the mix the foreign investors who love Australia and its stability to park their money.

Should there be a nasty recession or a significant hike in interest rates, I bet this will be the biggest crash in history. However, as the saying goes, the market can stay irrational longer than you can remain solvent, as the recent past illustrates.

Some people invest for tax reasons and others to park money outside of their own country. The rest invest for capital gains only, which is pure speculation.

Mind you, my best friend in Australia used to do cosmetic flips and made a lot of money with it but you need to be in the ground. Moreover, as a foreigner, you’re limited to buy new properties only, which are the most expensive and cannot be renovated since they’re brand new.

Lindsay Stewart · Answer

hi @Sophia Zhang

The Aussie market is surely a good investment.  I am a property investor in both the AU and US markets.  AU market is generally a very different creature though, much more expensive to get involved and without the backing of funding can be very hard to get in.

The government also charges fees for international investors so makes it even slightly more expensive.  Typical US strategies of rentals and/or flips are very difficult, with the high price of the properties, rental yields are very low, and renovating properties is difficult with taxes and duties unless you live in them as well...

Growth though is extremely strong, we are still seeing some areas with double digit growth, so as an investor, if you have access to buy and hold property with good land content, we are seeing 8-10%+ growth each year, coupled with being leveraged, this can give excellent returns

Cheers

Lindsay

Michael King · Answer

I'm Australian living in Missouri. I invest in Missouri. There is nothing to be had for me in Australia that would make a viable proposition. There is a tendency to run at a loss for tax advantages over there. You're probably better off going to CA or NY to invest. My 2 cents for you; good luck.

Does anyone know if Australia market is investable?

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