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Sydney’s Property Investment Mortgages: Maximizing Profit – PropTrack and CoreLogic reported house price gains in all capital cities except Darwin in October, suggesting a continued recovery in Australia’s housing market.
According to data from CoreLogic, the National Home Value Index (HVI) rose 0.9 percent in the month, accelerating from a 0.7 percent increase in September. The agency noted that the HVI has risen 7.6 percent since a “modest” shock in January, meaning the current number is just under half a percent from the April 2022 all-time high.
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CoreLogic research director Tim Lawless thinks the road to recovery will be “very soon”.
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He predicted that this would happen in mid-November, noting that “between May 2022 and January 2023 there will be a recovery after the -7.5 percent decline recorded in the last crisis.”
According to PropTrack, Sydney, Brisbane, Adelaide, Perth and regional Australia hit new highs in October; Sydney led the way and recovered all its lows in 2022.
PropTrack senior economist and report author Eleanor Krieg attributed the recent increase in volume to the spring selling season.
He noted that “housing demand remains strong, leading to further increases in housing prices and reflecting continued improvement in conditions.”
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Ms. Krieg also explained that “strong demand from resurgent net foreign immigration, tight rental markets and limited housing stock are offsetting significant growth and the impact of the economic downturn.”
Looking ahead, the economist acknowledged a “weak outlook for the economy” but did not expect it to affect property price growth.
In his view, interest rates may rise further, but “they are probably close to their peak, if not.”
“Due to a lack of new home construction and tough conditions in the rental market, house prices are expected to rise further,” he said.
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He noted that while house prices continued to rise in most capital cities, “the quarterly growth trend appears to be slowing”.
To illustrate this point, CoreLogic noted that house prices in the capital rose by 3.7% in the three months to June 2023. But since then, growth has slowed to 2.6 percent in the three months to October 2023.
Mr Lawless explained: “The slower rate of realization is likely due to a combination of higher levels of ad share as well as wider access.”
“With the flow of new listings on the market accelerating, buyer demand is unlikely to keep pace as we head into spring in an environment of high interest rates and low sentiment,” he said. The latest edition of the UBS Global Property Bubble Index recorded a sharp decline in housing market imbalances around the world.
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An analysis of housing prices in the world’s 25 largest cities found that real housing prices in these cities fell by 5 percent between mid-2022 and mid-2023.
Although house prices in Sydney are “volatile”, the city has retained its “overpriced” status since last year, despite being at its lowest level.
The report acknowledged that Sydney’s housing market experienced a brief period of market weakness between 2018 and 2019, after which “prices increased by around 25 per cent between 2018 and 2021”.
“Recently, the Bank of Australia’s sharp interest rate hike led to a sharp new price correction. “Inflation-adjusted prices have returned to 2018 levels,” the report continued.
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Classifying the market at the “lower end of the overvalued zone”, UBS said the upside is limited thanks to increased external demand.
In 2023, countries such as Miami, Geneva, Los Angeles, London, Stockholm, Paris, Toronto, Frankfurt, Munich, Hong Kong, Vancouver, Amsterdam and Tel Aviv were also included in the overvalued category.
Falling house prices around the world mean the number of cities classified as “bubble risk” has fallen significantly.
Nine cities are classified as at risk of a bubble bursting in 2022: Toronto, Frankfurt, Munich, Hong Kong, Vancouver, Amsterdam, Tel Aviv, Zurich and Tokyo.
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Assessing this year’s results, the report’s authors said: “Low financing costs have buoyed global housing markets over the past decade, driving home prices to dizzying heights.”
“However, the sudden end of the low interest rate environment shook the house of cards,” commented GWM’s President, Chief Investment Officer Swiss and Global Real Estate, and Matthias Holzei, Senior Real Estate Economist and Chief Investment Officer. GWM.
They acknowledged that “across all cities over the past year, inflation-adjusted house prices have fallen sharply since the 2008 global financial crisis.” Before you start planning your new Australian property, it’s important that you: Have a clear understanding of the legal landscape. Singaporeans are indeed allowed to buy property in Australia, but the process is subject to certain regulations and restrictions.
The Australian government operates within a policy aimed at increasing the housing stock in the country. Therefore, non-resident foreigners, including Singaporeans, are generally allowed to invest in new properties or vacant land that they acquire, but are generally prohibited from purchasing established properties for investment purposes.
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The body overseeing these regulations is the Foreign Investment Review Board (FIRB). As a prospective buyer, you must obtain approval from the FIRB before purchasing any property. It is important that you familiarize yourself with the application process and the types of properties you are eligible to invest in as a non-resident.
It should be noted that these restrictions do not apply to foreign investors in Australia. A Singaporean can buy a permanent home if he lives in Australia, even temporarily. But if they go abroad they have to sell their property.
When it comes to real estate investing, choosing the right property is the key to good returns. Some factors to consider are:
As a Singaporean, buying property in Australia involves several important steps. It is important to understand the process and be aware of the roles of different professionals in the process.
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It is important to consult with professionals including real estate agents, conveyancers and lawyers to ensure everything runs smoothly throughout the process. It should also be noted that the process may vary depending on the type of property you are buying and your personal circumstances; That’s why it’s important to be flexible and ready for potential challenges.
The Australian property market is not a single entity. It consists of many small markets, each influenced by factors such as local supply and demand, economic conditions and population growth.
Therefore, it is very important to study and understand the specific market you are interested in. Real estate information, market reports and local news can provide valuable information. Working with a local real estate agent can also be helpful as they can provide expert knowledge and advice.
Investing in Australian property also has tax implications. Rental income earned in Australia is subject to Australian income tax and you may also pay capital gains tax if you sell the property. Additionally, some states impose a land tax on property owners.
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However, there are also tax deductions such as property management fees, loan interest and depreciation. You are advised to consult a tax advisor to fully understand the tax implications.
As a Singaporean, buying property in Australia can be a rewarding journey financially and personally. Whether for investment purposes or as a home away from home, owning a property in Australia can provide a sense of achievement and satisfaction.
But this is a journey that requires careful planning and understanding. From navigating the FIRB guidelines, choosing the right property, understanding the Australian property market to managing the tax implications, every step is important to ensure a successful purchase.
While the process of buying property in Australia as a foreigner is entirely possible, real estate professionals can make your journey smoother and less stressful. Here are some experts you might want to consider:
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Once you buy your property, it is important to manage it effectively, especially if you are renting it. From finding tenants and collecting rent to managing maintenance and complying with rental laws, property management can be time-consuming.
You may want to work with a property management company, especially if you live abroad. They take over the day-to-day management of your property giving you peace of mind.
In conclusion, although buying a property in Australia like Singapore may involve going through various regulations and complex processes, it is definitely possible with the right knowledge and guidance.
Australia offers a strong real estate market and high standard of living, making it an attractive investment destination. By understanding the FIRB rules, selecting the right property, securing the right financing and managing the property effectively, you can enjoy the benefits of owning property “down under”.
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Remember that every property buying journey is unique. While this guide provides a general overview, your journey may vary depending on your specific situation and goals. Therefore, it is recommended that you seek professional advice appropriate to your situation.
Whether you dream of owning a villa on the beach or an apartment in the city, the Australian property market has plenty to offer. So are you ready to hit the road?
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