Should You Invest?
Although the tourism industry in Australia is huge,
the competition is high and there are many large hotel chains
operating here and so the yields on holiday lets are likely to be
less. The growing economy and shortage of good quality
apartments creates a demand from locals, and a long term lease
proves to be the most efficient strategy. Typically you can expect
yields of 4.5% around the major cities such as Sydney. However, the
increasing unavailability of property to rent combined with the
growing demand is likely to push rents up.
- Although the tourism industry here is flourishing,
competition for holiday accommodation is high because of
the proliferation of hotels.
- Buying in Australia is not as quick or as simple as in other
locations. Applications for foreigners buying here are reviewed on
an individual basis, and are not always approved.
- Australia is a strong stable economy with a strong rental
market.
- With a developed economy and undersupply of residential
property for rental, there is likely to be a demand for high
quality houses or apartments that are offered for rent/lease.
- The high entry prices and cost of living imean this market is
more suited to lifestyle purchasers than those looking for a great
investment with large returns.
Rental Yields
Rental yields are rising considerably across Australia,
especially in major cities such as Sydney. Rents on city centre
apartments are constantly increasing; the average rental yield is
5.56% for 50 sq m accommodation.
Apartments now cost an average of US$7,690 per sq m for a small
unit up to US$1,454,000, or US$9,693 per sq m for larger units.
Price History
The property market in Australia has fluctuated over the past
decade. The 1990s saw a massive boom, fuelled no doubt by the
Olympic Games that were held in Sydney in 2000. Between 1997
and 2003, some areas saw the value of property rise by 112%.
However, following this, the market became fairly stagnant and
drops in value of around 8% were witnessed in some places. Real
estate here is now steady, and looks to be progressing. The
continual growth in population and tourism levels has resulted in
serious undersupply, with residential vacancies around 1.9%
(anything under 3% is considered undersupply).
Top