Australians are viewing the US as a good property investment opportunity, but real estate experts are cautioning investors to do their research before making an investment.
Australia has a strong dollar and the US property market has an abundance of foreclosures on the market. With median prices being much lower in the US, Australians are tempted to make overseas investments to enrich their portfolios.
The median house price in Perth, Australia is $465,000 and in the US is $210,000. With the falling rate of home ownership in the US, the market is peaking the interest of international investors.
According to Leigh Gavin, head of property research at Frontier Investment Consulting, for every 1 percent that home ownership rate falls, it equals about 1.1 million households.
In the last year, about $600 million dollars have come in from Australian investors into the US property market. Some are even paying for investments that they have never seen. This may not be wise though, if the area that the properties are being purchased are not in attractive areas. The potential for loss in the future is greater if the area is run down or in a high crime area.
Some experts are advising that investors look into multi-family housing and some companies are available to assist overseas investors find and purchase such housing for as little as $10,000. Multi-family housing is booming in the US due to Generation Y’s reluctance to purchase their own homes with the economy the way it is.
In Australia, yields on apartments are about 2-3 percent, but in the US yields are about 5-6 percent. The US property market is expected to continue to see slow recovery this year, as more and more people begin to show interest in purchasing homes once again.
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