The property market is hot right now as prices and values across Australia continue to rise.
With interest rates still at record lows, many are taking the opportunity to dive into investment properties.
In Sydney, house prices rose a record 8.5% between January and March 2021, and overall capital city house prices rose 10% in the year to March 2021.
According to a recent survey, 82% of Aussies believe that the housing cost increase is due to Chinese investors. However, analysts and economists say this is due to domestic Australian buyers and record low-interest rates.
Who’s Been Buying Australian Property?
Believe it or not, Chinese investors weren’t buying the most property in Australia between 2019 – 2020—it was the USA.
According to the annual 2019-2020 report published by the Foreign Investment Review Board, the top five countries investing in Australian real estate are:
- United States: $13.1 billion
- Singapore: $9.5 billion
- China: $7.1 billion
- Germany: $3.7 billion
- Canada: $3.3 billion
Impact of Closing the Borders
In March 2020, Australia closed its borders to non-nationals and non-residents. Since then, the country has been allowing only limited international arrivals, mainly citizens returning from abroad.
The closing of the borders has had a significant impact on the purchasing and renting of investment properties. Many people who owned apartment rental properties have found it difficult to fill since the international students returned to their native country.
Currently, the Australian government is looking to re-open its borders in mid-2022. So, what are the analysts and experts predicting will happen to the housing market?
The Market is Strong
According to Juwai IQI analysts, “The Australian market is already strong despite the lack of migration. Further upward price pressure will likely result as inbound migration resumes. That rapid price growth attracts buyers eager for a safe investment and afraid of missing out on an opportunity,” they wrote in a new global report.
“Many buyers have not purchased during the pandemic, and some will make those transactions in relatively short order when borders re-open.”
When the borders open, the nation is expecting a large influx of migration. The drastic increase in the population will put pressure on the housing market. The cost of housing has been increasing despite lockdowns, border closures, and decreased population.
According to recent CoreLogic data, Australian house prices increased on average by 2.1% in February, the most significant month-on-month increase in 17 years.
The data showed that Sydney’s median house price increased by 4.8% over the last three months, while Melbourne’s median house price rose by 4.2%.
AMP Capital chief economist Shane Oliver said that a slow and gradual re-opening of international borders is needed to ensure a sudden spike in housing demand doesn’t send house prices skyrocketing even further.
What does this mean for you? If you’ve been considering investing in property, now is the time to buy. Purchase before the borders re-open, and while interest rates are low and the banks are willing to lend money.
We Can Help
Ready to start creating passive income with property? Think you’re ready to invest in one or more properties? We can help! At OneCorp, we walk you through every step of the process at NO cost to you. We create a personalized property strategy and help you find the best opportunities on the market so you know you’re getting the best return. Getting started on your investment property journey has never been easier:- We start by helping you set clear goals and objectives as to what you want to achieve through property investment.
- From there, we run the numbers through proprietary software to accurately assess exactly what you need out of a property portfolio to achieve those goals.
- Lastly, we find the perfect property to make those objectives a reality!
