Relax in the Outback: Why You Should Invest in an Australian Home

australian home

Real estate is a great investment option for most people. For one thing, you can get passive income from making the home a rental property.

And, the home can appreciate in value exponentially in a few years. What other investment is going to pay for itself month-to-month and then give you a huge cashout in five to 10 years?

Buying an Australian home is a good idea for American investors for several reasons. Great weather, lifestyle, and there are several economic and political advantages too.

Read on for the top reasons why investing in Australian real estate is a smart idea for foreign investors.

Australia is a Wonderful Place to Live

In a top 10 list of the most livable cities in the world, Australia snagged three spots.

Australia is known for being a place of incredible fauna, flora, and breathtaking views. Australia has plenty of everything you could want: rainforests, snowy mountains, deserts, and beaches. It is an incredibly diverse land that has something for everyone.

It has many internationally diverse cities. Queensland is world renowned for its reefs and sandy beaches. Victoria has beautiful coastline towns and cities.

The Northern Territory is well known for its outback Aussie experience. And New South Wales is home to mountains and Syndey with its plethora of cultural attractions.

The Weather

We can’t talk about Australia without mentioning the glorious weather. In Australia, you will enjoy four temperate seasons. The winters are mild and the summers are hot.

In Melbourne, summer temps can be above 40 degrees C and in winter they can dip to 6.5 degrees C, and energy costs are some of the highest globally. So, double glazed windows are a must on your Aussie house. Click here for more info on double-glazed windows.

During the fall you can expect a cool breeze and fresh, crisp air in the spring months.

Remember that Australian seasons are opposite than those of the Northern hemisphere. December through February is summer in Australia. And, June to August is winter.

Safe Country

Australia is one of the safest places on the planet. Six of its cities ranked in the top 50 safest places in the world.

Cities in Australia have the infrastructure to be safe places to live, work and study.

Australia Real Estate Stability

Australia has never had prices fall more than 20% in one year. The American housing crisis of 2007-2009 has made many U.S. investors fearful of purchasing real estate overseas.

Yet, a look at Australia’s property market shows a track record of stable prices and a low risk of asset price bubbles due to 70% of housing being occupied by the owners. In fact, during the Global Financial Crisis where property prices plummeted in the U.S. and in the U.K., Australian property prices went up.

In Australia, there is less supply than demand in many major cities. The population of Australia is growing at a faster rate than the construction of residences. That means that finding renters for Australian houses is easy for foreign investors.

It’s Easy to Invest in Australian Real Estate

In some parts of the world, it can be extremely difficult for foreign investors to bypass the regulations and laws.

But in Australia, you don’t need to co-sign with an Australian citizen. You also don’t need to set up an Australian company.

Also, the legal system in Australia is similar to the U.K. system. It is not as foreign as many systems elsewhere in the world.

There is consumer protection legislation in Australia that offers you peace of mind and security. Also, foreign investors can contact specialist brokers that help them obtain financing.

Best of all, there are interest-only mortgages available so that property owners can purchase houses and just pay the interest for 5-10 years. Investment properties are much more affordable this way.

Buying an investment property can be part of your retirement strategy.

Australia’s Consistent Growth Performance

Australia’s real estate market has seen steady capital growth over the past hundred years. Property prices tend to double every 7-10 years.

That is a significant return on investment in a decade or less. In fact, Australia’s strong economic growth rates are higher than many countries including the United States and the U.K.

One of the reasons for this growth is due to the stable economy and political situation. In Australia, the GDP is on par with most European countries.

Brisbane and Melbourne saw a 3% increase last year, while Perth continually achieves a 15% capital growth per annum.

Where Should Investors Buy an Australian Home?

If you are considering real estate in Australia, your biggest question is probably where to buy.

The safest route is to avoid the exclusive, luxury homes and the low-income housing complexes. Instead, choose to purchase a home in an area that has excellent resale potential as well as rental potential.

There is less demand for million dollar rental homes than there is for mid-market, decent family homes. Look for homes in middle-ring suburbs where families would want to raise their kids. And where people have more disposable income than in the poorest areas.

For example, Bentleigh in Melbourne, Randwick in Sydney or Stafford in Brisbane would all be great choices. These areas will continue to offer investors long-term capital growth and good rental returns. Regardless of the changing real estate market.

Bottom Line on Australian Real Estate

Remember, if you choose a decent-sized home in a good location, there is no reason why you won’t see a great return on your investment. Your Australian home will give you constant renters and the ability to see the property down the line whenever you wish.

Considering other options for your second home? Check out these 10 gorgeous locations.