The property market in Australia continues on its upward trend today especially in the Sydney and Melbourne markets as well as our own in Newcastle.
In Brisbane and other cities, the situation has stabilised. Evidence shows the housing turnover is increasing.
Based on these conditions, is it safe to say it is the right time to invest in Australia?
Here are six reasons to invest in Australia’s housing market:
- Tax advantage
This ensures that homeowners will not lose as much money on an investment. This type of tax break in Australia is called negative gearing. The term implies that your expenses and interest payments are higher than your return. It indicates that even if the home value increases annually and you have positive cash flow, it still could be losing money.
The loss from negative gearing covers the computation of many factors, including property income, property expenses and depreciation.
You will need to compute the amount you can subtract from depreciation, or ask your accountant can do that for you. The expenses consist of capital items, revenue deductions, building allowances, etc.
If you have a loss, you can avail of a tax break on all your income. This is done by offsetting the net rental loss from your other income. The outcome is that, for tax purposes, your income is less. This means you pay reduced taxes at the end of the financial year.
This tax benefit is one of the biggest appeals to property investors.
Australia managed to stay afloat when the US real estate market crashed in 2008. Other countries like Spain and Ireland felt the crash, but the federal government successfully stopped home prices from declining.
One of the daring moves it made was to increase the amount of grants to first-time home buyers. From $7,000, the grants were raised to $14,000 for established homes and $21,0000 for new-builds.
The massive increase was opposed by many. But it turned out to be one of the main factors why housing prices in Australian remained on an uptrend at the same time home prices in the U.S. declined.
- Robust property market
If you are purchasing a home for investment, the market conditions are on your side right now. The property market is flourishing again following a brief slowdown. It is enjoying a strong uptrend at present. It was 2017 when the Australian market last enjoyed a strong performance. A significant number of Australians are intent on purchasing a home today.
- Beautiful vista from Australian homes
If you want to invest in property with some of the best views in the world, then buy in Australia.
The various regions offer an assortment of views, from our Sydney Harbour to the Blue Mountains, golden beaches, tropical hinterland or vast open plains – Australia has it.
- Accessible for foreigners
There are strong laws about foreigners buying properties in Australia. The Foreign Investment Review Board (FIRB) is the regulatory body for investments by foreigners, both for property and business.
You need to undertake certain processes to be qualified to purchase. You have to also follow certain rules. For example, you’re not allowed to purchase a house if you don’t intend to live in it full time. However, you can purchase a newly constructed property if you plan to live in it intermittently. You can also purchase new-builds for investment.
You need to seek approval from FIRB for both these options. But there is one option that doesn’t require approval – purchasing a new plan or apartments directly from the developer.
- Standard of living
Australia ranks high in many areas of human well-being. It performs well in income, education, environment, health, life satisfaction, etc. In general, Australia is a good place to seriously consider if you want to live or invest in an area that guarantees a high standard of living.
Many cities in Australia also measure well in terms of public transportation. It is easy to move around using buses, trains, trams and taxis.
If you want to travel to other regions, flying domestic is cheap. Fares are even cheaper for buses and interstate trains.
Contact us today at One Agency Pinkerton Properties for more information and we will get you in contact with professionals who can help.