Information supplied by We Buy Houses
Its been projected that interest rates are set to remain at a record low for at least the first half of this year, yet Australians are feeling the increasing competition of foreign investors as they enter the property market.
Disclaimer: while due care is taken, the viewpoints expressed by contributors and/or sponsors do not necessarily reflect the opinions of Your Investment Property.
One of the main causes of this is namely the implementation of the government’s “significant investor visa” program. The intention of this program is to encourage foreign investment within Australia.
Recent Australian Foreign Investment Review Board figures have revealed that Chinese investment in Australian real estate has, over the last two years, grown by nearly 60 percent. This is a trend that may impact everyday Aussies’ ability to enter the property market.
In recent years the Chinese government has taken steps to slow down its country’s property market, capping investors’ real estate holdings to just two properties.
Chinese and provincial governments are taking even more steps to slow down the market. In the capital of Henan province, Zhengshou, an age limit of 20 years has been placed on property purchasers to prevent investors from buying properties in the names of their children. It has also been reported that couples are divorcing to enable both husband and wife to buy properties in their own names.
Because physical investments are attractive to the Chinese, the nouveau riche from that country is looking further afield when they want to grow their property portfolios.
Its geographical proximity, the sound state of its economy, and the number of Chinese students studying here, makes Australia an attractive option – particularly the city of Sydney, and some of its suburbs.
The main concern is the number of properties that are being purchased, and then just ‘locked up’ as investments, and not lived in. Unfortunately, this practice will continue to impact the number of properties available to Australian purchasers.
Unless our governments look very closely at the way foreign investors, not just including the Chinese, are entering and influencing the Australian real estate market, then there could be serious consequences for everyday Aussies wanting to enter the market.
It is inevitable that with the increased competition for available real estate, prices will continue to rise. The market has been stimulated by government initiatives as well as foreign investment, but even so, there are opportunities for those who don’t have a bank deposit to enter into the housing market -including strategies such as Seller
Finance, which has been around since the 1850’s, that allow people to seize those opportunities.
Those who are battling to save the deposit to purchase a home are encouraged to watch this trend, and look beyond the traditional bank mortgage scenario.
Seller Finance is a strategy that Australians can adopt in the property market at this time. The buyer, instead of paying the full amount up-front, can pay the property off in a number of instalments over time.
The success of these strategies comes from facilitating flexible payment terms between the buyer and seller, rather than forcing the buyers to pay the entire value of the property in one lump sum.
It’s this forward thinking approach that helps any buyer, young or old, buy a property without needing a large cash deposit or even applying for a bank loan. Flexible payment terms set this strategy apart from the traditional process. The good news is, there is an abundance of these types of innovative options available to investors and first homebuyers.
If you’re interested in finding out more about how to gain the winning edge in a competitive market, click here for a free information pack.
Australian property investment specialist and best selling author, Rick Otton, has been investing and teaching his innovative real estate strategies for 23 years. As the founder and director of We Buy Houses Pty Ltd, his goal is to empower people with knowledge through his cutting edge investment strategies.
For the last 23 years, Australian property investment specialist and best selling author, Rick Otton, has been investing and teaching his innovative property strategies. As the founder and director of We Buy Houses Pty Ltd, his goal is to empower people with knowledge.
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