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Australian Residential Property

The following chart figures indicate that there has been strong capital growth in half of Australia’s capital cities over the last 5 years to March 2017:

  • City
  • March 2012
  • March 2015
  • March 2017
  • 5 year gain
  • Sydney
  • $525,000
  • $690,000
  • $805,000
  • 55%
  • Melbourne
  • $465,000
  • $518,000
  • $605,000
  • 30%
  • Brisbane
  • $400,000
  • $449,500
  • $480,000
  • 20%
  • Adelaide
  • $370,000
  • $405,000
  • $439,000
  • 19%
  • Perth
  • $445,000
  • $513,000
  • $475,000
  • 6.7%
  • Hobart
  • $340,000
  • $310,000
  • $355,000
  • 4.4%
  • Darwin
  • $470,000
  • $540,000
  • $490,000
  • 4.3%
  • Canberra
  • $530,000
  • $530,000
  • $586,500
  • 11%

What you need to consider now is the extent to which rising interest rates and tighter financing conditions might impact on property prices.

If you are living and working overseas for an extended period of time and have saved some cash, then investing in Australian property might be of interest to you. Many Australian expats are more comfortable investing in Australian property as it is a ‘known quantity’ in the sense that you know what you are getting in terms of legal title and you can see from historical data how the residential property has performed compared to other asset classes. The asset is also denominated in AUD, which most Australians would regard as their ‘home currency’.

However, by virtue of being an expat, you may also have more exposure to offshore property investment options, which could generate higher returns for you. The bottom line is that you have to consider the likely total returns after tax and after costs, and then assess what risks you are exposed to in order to generate those returns.