Buying property in Sydney
Dubbed the most reliable city in the world and certainly one of the world’s most liveable cities, it’s no surprise that Sydney is a key entry point for new arrivals to Australia, and hosts the highest population of ex-South Africans living in the country.
For those who dig a little deeper, Sydney holds other attractions too. While the futuristic CityRail flies past dazzling apartment blocks and office towers, the city itself boasts time-worn wharves, old public offices and stately religious spaces beautifully transformed into dynamic gathering places where ancient and modern marry to create a remarkable new-age fusion. Besides the culture, cuisine, beaches and parks, institutes of higher education and flourishing businesses that attract overseas migrants, Sydney offers an advanced economy, effective government and a safe, clean, appealing environment.
These facts, however, are widely known, and Australia’s housing market is one of the most expensive in the world (house prices rose by almost 10 percent last year). Sydney comes out tops, with the majority of its suburbs having median sale prices of more than AUD1 million (approximately R9,7 million).
According to Jenese Malone of PR Australian Properties, ‘Sydney has now peaked.’ This is echoed in the growing sentiment that middle-class and first-time buyers are being pushed out of Australia’s housing market, a situation that has prompted a parliamentary review of the favourable foreign-investment laws and examination of the fact that, over the past seven years, Chinese have bought some AUD24 billion (R232 billion) worth of property in the country.
Like many South African counterparts, breadwinners are increasingly resorting to living and working in separate cities through fly-in-fly-out arrangements in order to offset Sydney’s residential price hikes and traffic congestion.
Settling in Sydney
For those wanting to live in Sydney, advice from agents is to box clever. While the prime city areas sport slick studio-style accommodation, there’s value and space further afield.
‘The Sydney property market has continually captured headlines over the past 12 months,’ comments Brendan Fearn of Bresic Whitney. ‘Talk of a “property boom” has progressed to concerns of a “property bubble” but, despite this, the market continues to deliver value for savvy buyers. Although we’re all interested in how the wider market is performing, understanding Sydney’s micro markets is far more insightful. While much of Sydney has been booming, other areas have dropped in price, driven by varying levels of supply and demand that shift over time.
‘Sydney’s Inner West district continues to offer untapped value. Situated in close proximity to the CBD and offering a vibrant café culture, areas such as Marrickville are attracting increased buyer interest, where a one-bedroom apartment recently sold for AUD665 000 (R6,747 million), up from its previous sale price of AUD415 000 (just over R4 million) in 2003. Inner-city terraces also continue to attract strong demand, with a three-bedder in Redfern selling for AUD1,41 million (approximately R13,677 million) this August, up from its AUD920 000 (R8,924 million) sale price in 2012.’
While sailing to Sydney is no new phenomenon for South Africans, says Reuven Abeshouse of Migrate2Oz, there has been a notable recent increase in migration by people primarily seeking a future for their children. And although advisors say there are compelling reasons to invest in Sydney, their loudest advice is to buy investment property before (or without) moving to Australia and, if emigrating, to rent for at least a year before deciding where to buy.
With a rand that has lost 35% of its value against the Australian dollar over the last five years, and Sydney ticking many boxes, there’s food for thought for South Africans serious about their international buying capacity.
Five Reasons to invest Down Under?
1. Australia is politically, economically and financially stable, with development and infrastructure having reached an all-time high.
2. The rate of unemployment is under 5%.
3. Australia has one of the fastest growing populations in the world, which, together with rising incomes, has ensured that demand for housing in Australia outpaces supply.
4. The Australian Government awards significant tax incentives for people who invest in property for rental purposes.
5. An investment of a little as R1 million will contribute to your global financial leverage.
How it Works
- If you own a property that is rented out in Australia, you will enjoy significant and accruable tax benefits.
- You will pay little or no tax on rental income (and can claim any shortfall between rent and income).
- You can buy a property in Australia whether or not you live there and whether or not you ever intend to live there, although non-residents can only buy off-plan or new builds.
- You can open an Australian bank account from South Africa and deposit money into it and make withdrawals.
- You will be able to arrange a mortgage in Australia to buy Australian property before you live there, allowing you to establish an Australian credit rating.
How to immigrate to Oz.
- Through an agency such as Migrate2Oz acquiring a permanent residency visa takes six to nine months.
- With this you can live in Australia and, after four years, you will become a citizen.
- The process is relatively straightforward with skills, qualifications and family ties being advantageous.
- Matters such as foreign exchange control, Foreign Investment Review Board approval and differences in purchasing processes are relatively simple under the guidance of a good agency.
- PR Australian Properties: praustralianproperties.com
- Australian High Commission South Africa: southafrica.embassy.gov.au/ (012) 423 6000
- Migrate2Oz: migrate2oz.co.za
- Bresic Whitney: bresicwhitney.com.au
- David Bettini: firstname.lastname@example.org
- McGrath Estate Agents: mcgrath.com.au
- Ray White Diesel Estate Agents: raywhitedieselestateagents.com.au
- Sydney Sotheby’s Realty: sydneysothebysrealty.com