So, why should you look to sell Australian property to UK buyers? It’s fair to say that the Australian property market underperformed as 2015 came to a close. It’s no coincidence that property prices in both Sydney and Melbourne have cooled down just as commodity prices have declined around the world.
The Chinese were big buyers of Australian property for that last decade or so, but since the stock market crash in China, many wealthy Chinese have decided to restrict their spending, at least for 2016. So homeowners in Australia are better off looking at Brits to buy property there. UK buyers have always been the top investors in Australian property, and now they look more important than ever before.
2015 was a strange year for the property market in Australia – they year actually began very well and a lot of people were predicting a double digit growth in property prices across the country. That didn’t happen. Sydney and Melbourne still ended the year well, Sydney closed with a growth of 12.8 percent and Melbourne at 11.8 percent - but the same cannot be said of other cities such as Perth, Canberra and Darwin.
However, there are many who say that the Australian property market was overheating and the cooling period that we are likely to see in 2016 is actually a good thing. Aussie Home Loans chairman John Symond said that a cooling period was welcome and that 2016 “should provide buyers with a bit more breathing space to relax and take their time choosing the best house or apartment for their needs and aspirations.”
Tim Lawless, the Head of Research at Corelogic RP Data adds, “Over the past three months we saw five of the eight capital cities record a decline in dwelling values, with Sydney down one percent and Melbourne, 0.5 per cent. We may see further declines during 2016; however, considering the high rate of population growth and stronger economic conditions in these cities, I’d be surprised if the fall was more than five per cent before conditions start to level.”
Real estate analysts don’t expect Sydney’s run at the top to continue for long. 2016 should be the year when Brisbane overtakes both Sydney and Melbourne in the growth stakes. Brisbane is Australia’s third largest city, and finally, it may be getting its moment in the sun.
Indeed, the whole of Queensland, not just Brisbane is expected to do well in 2016. Queensland didn’t have a great 2015, but that is expected to change in 2016, as a lot of investors are looking at Brisbane and Queensland as an alternative to the overpriced markets of Melbourne and Sydney.
Yields in Brisbane are much better than what one would get in Melbourne and Sydney, and the lifestyle here is much more affordable as well. Hobart is another interesting city with high rental yields that a lot of investors are looking at very closely.
However, the same cannot be said about Perth and Darwin, where the rents are seemingly on a precipitous decline. The same can be said about Adelaide as well, although the decline in prices here is not as much as in Perth and Darwin.
Australia has a new government in power, led by the business-friendly Malcolm Turnbull, who has introduced many tax reforms to make real estate transactions easier, and has attempted to lower the concessional capital gains tax on property sales as well.
So while 2016 may well be a year of widespread global uncertainty and slow economic growth, Australia is still expected to be politically and economically stable – which is good news, indeed.