Finance Insider

Being a home buyer doesn’t necessarily mean that you have to purchase a home for your primary residence. You can also buy properties for commercial purpose. Real estate investment in Australia is quite a lucrative business with latent amount of money associated with it. The investment opportunities available in Australia are quite sensational. It is a land mass that is almost the size of the United States of America but with a population of one tenth of it. The categories of real estate are varies too. There are multiple projects that are on the path of development and in the planning stages. These include family homes for home buyers, commercial establishments and rural or farm properties. Here are stating some reasons why Australia is a low-risk profitable option for investment in real estate.

1.Good returns with protection against inflation – If various investment sectors are compared over the past 20 years, then it has been observed that the investment in property provides returns that are higher as compared to many other asset classes and it also provides a hedge against inflation. Property in Australian has seen a consistent growth of average annual growth rate of 7% per year in the past 40 years. The Return on Investment (ROI) is quite phenomenal as the property value doubles every 7 to 10 years and gets compounded with the leverage that property offers.

2.Investment performance that is consistent – Australia has one of the most diverse economies in the world which is also advanced. The GDP growth of Australia is expected to continue at a steady pace of 2.5% to 3 % rendering the continent an excellent location for investment. It is anticipated that in the next decade, household sizes in Melbourne will fall from 2.6 to 2.25 persons. The population of Melbourne is facing an average growth of 1.1% per annum. The households in the city of Melbourne are forecasted to increase by an amount of 20,975 by the year 2021.

3.High leveraging ability – You get higher rates of return on your investment when there is leverage to your investment. In Australia, lenders provide up to a 100% on property which is more than on any other asset class. This is because most property in Australia is viewed as a low risk investment that has a capital growth which is promising. Since investment is something that is not out of reach for most people, it is easier to invest in real estate as only a minimum outlay is required in order to secure this asset.

The above factors coupled with strong demand factors being anticipated in future because of a rise in population and decreasing household size makes Australian property a worthy investment.