There has been plenty of talk recently about foreign investment in to Australia recently. Most if not all of the discussion has been around the influx of Asian investors coming in to the market and buying up big in Melbourne's eastern and western suburbs, and across Sydney there has been a strong buying movement by asian investors all over the city.
But as time continues, and the Aussie dollar weakens against the US dollar, it is going to become more attractive for Americans to buy in to the Australian real estate market. Here are some further reasons why this could happen.
1. The US Dollar has remained solid:
Whilst the rest of the world, especially Europe has been in some form of continued melt down, the US dollar has stayed remarkably strong. Looking at a measure of the US dollar against the AUD. In July 2014, the AUD was buying nearly 0.95 USD - less than a year later, this has gone down to around the 0.75 USD mark. This is a drop of over 20% - meaning that the USD is going 20% further than it did and currently will in the US economy.
2. The US have already started cashing in on European debt:
The Yanks have already seen the upside of buying international property, strongly investing their money in to the European economy as Europe struggles with their debt crisis. Property prices in Europe fell some 40-50% in certain areas, and US citizens have swooped. Whilst this doesn't directly effect investment in to the Australian market, it does demonstrate the willingness for international investors to explore international investment, and the foray in to Europe shows they are not afraid.
3. Australia is already a familiar investment location for US citizens:
Whilst all the hype has been about Asian investors, people sometimes forget the willingness and high levels of activity that US citizens have been involved in, for an extended period of time in Australia. The US plan to spend nearly 65% of the amount that Chinese investors are planning to spend here.
4. Australia is all the rage at the moment!
A new report by CBRE has found that Sydney has emerged as one of the top four destinations for international property investors, ranking ahead of New York and Paris. Further to this, the decreased barriers between countries has meant that, with 38 per cent of respondents intending to invest outside their own region this year – up from 28 per cent in 2014.
5. New homes and vacant land are not such bad investments:
The rules stipulate that "foreign buyers can only purchase new homes or vacant land, and only for investment purposes" whilst this may have been a deterrent for US investors in the past, and something advised against by local residents, the increased demand does provide some good signs for these investments. New homes, in a lot of cases receive a better rental return than other properties, and whilst they may not have as much appeal as more traditional homes, they are still attractive.
So what's next? Are we going to see further international investment in to the Australian market from the US? It does make sense to see further investment from other markets such as the ones in the EU. Whilst laws are being toughened to prevent exploitation and and an abundance over international investment locking out locals, it does make sense, and we could be in for further investment from American shores.
About the Author:
Todd Schulberg handles all things marketing for Homely.com.au - Living and breathing property, Todd has a keen interest in the movements in the market and how agents can utilise new tools and technology in order to be more connected. Using all things social, Todd suggests different ways that agents can engage and think outside the square with their marketing approach.