THE importance of expats getting on the property ladder back home was highlighted recently by Dr Frank Gerber, chief economist at BIS Shrapnel.
“We’re not over-geared, we’re not overvalued, and we’re not oversupplied…I can’t remember in the last 30 years a time when I have been more comfortable and optimistic about investment in the market,” said Dr Gerber. “Perth properties [in particular] would increase a minimum 6 per cent for each of the next three years”.
Australian Property Monitors (APM) tips the Perth real estate sector to pick up strongly in the second half of 2011 as the latest mining boom intensifies. APM senior economist Andrew Wilson said: “The group is forecasting growth of seven per cent in Perth for 2011.”
WA Premier Colin Barnett ruffled a few feathers recently when he told first time property buyers that they were being unrealistic about what they wanted and should lower their expectations.
“The reality is you can’t start with a Mercedes — when you buy your first car you start with a Hyundai and work your way up.”
According to Ken Regan from Australian Homebuyers International (AHI), the writing is on the wall for those who hesitate to get on the property ladder.
“Many Australian property investors including Aussie expats can’t see past their own backyard,” said Mr Regan. “They often think that the state or even the suburb they live in is also the best place for an investment property.
“This is hardly ever true as the market is continually changing and the family home is a decision normally based on emotion and not necessarily on capital growth.”
Mr Regan said that the Australian expat tendency to wait and see, coupled with their reluctance to consider anything outside their comfort or state zones can be depressingly familiar.
“When our non-Australian clients from literally all over the world have the vision to invest in property completely outside their country of birth and residence, don’t you think it’s feasible for you to look at another state?”
I asked Mr Regan which state he thinks has the greatest capital growth potential over the next few years.
“Well, no city better illustrates the China boom [and interest in Aussie property] than Perth and WA, a state five times the size of Texas that holds the bulk of Australia’s mineral wealth,” he said.
“The state’s average income has jumped to more than $70,000 in the past five years thanks to China’s purchases of iron ore, natural gas and other resources. Unemployment is at 2.6% and predicted to drop this year. The national rate is 5.5%.”
There’s no doubt that Perth is bristling. Add to this more than $1 billion in new construction investment plus more than 110 people moving to WA every day, it is currently the fastest growing state in Australia.
“Perth is undoubtedly an interesting market. Capital growth is absolutely assured, and due to a continued housing shortage, stable rental conditions will continue,” said Mr Regan.
“We simply cannot emphasise strongly enough how important it is to get into the Australian property market now, particularly in Perth, where we see the highest potential for capital growth.”
Mr Regan said the message he wanted to get across to Aussie expats is this: never mind where your heart lies, follow the investment dollars.
Telephone Ken Regan +44 (0) 207 060 0066 or visit www.ahinternational.net.au