Is the 111 High Street property a good investment in Melbourne?

Overseas investors and migrants may be unaware of the possible benefits of investing in Melbourne real estate. In the same way, people from other countries, even those with short or permanent visas, might not know that they can get an Australian home loan. Foreign investment in Australia is expected to increase in the upcoming years. The Melbourne property market is well-known for its consistency, expansion, and ease of investing. Whether you’re an expat or a foreign national, keep reading to learn how to take advantage of the 111 High Street property Melbourne real estate market and gain huge benefits.

Why Invest in Property in 111 High Street Melbourne?

The Melbourne 111 High Street real estate market is appealing to buyers for several strong reasons. Most importantly, you don’t have to live in the country to make money from real estate assets. As a foreigner, the process of buying a home may be a little different from that of a local or an Australian living abroad.

There’s no reason you can’t start making money from your investment by buying properties in famous areas like 111 High Street Melbourne. Australia’s varied landscape and growing population—more than half of all Australians now live in capital cities—keep house prices going up. Australia’s real estate market is stable, and there are many other reasons why investing in it is a great way to diversify your property assets.

Consistent Growth

Melbourne investment properties like 111 High Street in Melbourne or 501 Swanston Street not only offer stability but also impressive capital growth. House prices have risen by more than 10% in the few past years. While the pace of property price growth is moderating, it continues at a steady rate.

The key reason behind this consistent capital growth is the severe undersupply of housing in Australia’s capital cities. The population growth outpaces housing construction, ensuring solid long-term returns. Rental income can also contribute to a steady return on investment, with an average rental yield of around 4% during the first quarter of 2023.

Read also: Why You Should Invest in the Best Land for Sale in Wollert

Stability

The Melbourne property market is renowned for its stability, even in the face of rising house prices. Several key factors contribute to this stability:

1. Low Speculation: As of 2023, approximately 70% of households were owner-occupied, which has resulted in relatively low speculation in the market. Fewer investors mean that house prices are less volatile, making Australia an attractive prospect for property investors.
2. Consistent Demand: The majority of Australians reside in the five capital cities, resulting in a consistent demand for housing. This ensures a steady rise in house prices. To further incentivize overseas property investors, the Melbourne government offers initiatives to increase housing supply, especially for new housing.
3. Regulation and Economic Management: Australia maintains responsible lending legislation and economic management. For instance, in 2023, they upheld lending restrictions, mitigating the risk of the housing market becoming an asset price bubble.
4. Historical Resilience: Australia has never experienced a price drop of more than 20% in a single year, making Melbourne investment properties an appealing option for overseas investors.

Compared to global markets, the Melbourne property market remains remarkably stable, exemplifying the real estate market’s resilience.

Foreign Investment

It’s a common misconception that foreign nationals cannot invest in Melbourne property unless they are permanent residents. Many countries have strict regulations surrounding foreign investment, but buying an investment property in Australia, especially a new build, is relatively straightforward. However, foreign investors still require approval from the Foreign Investment Review Board (FIRB) to purchase established properties.

For those who are not Australian citizens, applying for FIRB approval is essential. There is no need to establish a company in Australia or co-purchase with a citizen. The main requirement for foreign investors is that the property must be new or vacant land for building purposes.

Temporary residents can purchase established dwellings for personal use, but investment properties must be new builds or vacant land. While the approval process is straightforward, there may be associated application fees and taxes.

Great Place to Live

Australia is an exceptional place to live, making it a desirable destination for property buyers. Whether you’re looking to invest or reside in the country, here are some compelling reasons:

• Affordable Rent: Due to Australia’s negative gearing policy, rental prices remain affordable, allowing you to explore your preferred location without straining your budget.
• High Standard of Living: Australia boasts a high standard of living with quality healthcare, ample job opportunities, excellent education, social connections, and personal security.
• Sunny Climate: Australia is renowned for its beautiful climate, with many cities enjoying over 200 sunny days a year, facilitating year-round outdoor activities and events.
• Quality Healthcare: Australia offers a comprehensive healthcare system, accessible to both residents and foreign nationals with permanent residency.

The best places to live in Australia include Melbourne, Adelaide, Brisbane, Tasmania, Canberra, Sydney, Perth, and various regional areas known for their natural beauty and relaxed lifestyle.

Before Deciding to Invest in Property

Investing in property, while generally at lower risk compared to other investments like the stock market, still carries a degree of risk. If you are a Melbourne citizen living abroad, buying and renting out an investment property in 111 High Street Melbourne Australia while residing elsewhere might seem like a significant commitment. Before leaping, consider the following:

What are Your Goals?

• Determine why you want to invest in Melbourne property. Are you attracted to the lifestyle, aiming to build wealth while living abroad, or seeking to diversify your investment portfolio?
• Consider whether you are a foreign national wanting to live in Australia, an expat wanting to diversify investments, an Australian citizen living overseas looking to earn rental income, or an Australian citizen seeking investment diversification.

Australia’s property market, while having relatively high prices, also presents lower risks compared to many other countries, offering consistent growth potential.

Assess the Risks

No investment is entirely risk-free. The primary risk of property investment lies in its lack of liquidity. If you encounter cash flow issues a few years down the line, your property investment may not be readily convertible to cash. Additionally, there is a risk that your chosen area may not experience a rise in property prices. It’s essential to evaluate whether you can handle the potential financial implications.

Consider the potential tax deductions, asset security, and property price growth that come with an investment property. Weighing the risks and rewards is vital to make an informed decision.

Practical Considerations

If you’re a Melbourne expat, practicality becomes a key consideration when buying a Melbourne property investment. To ensure you make the right choice, it’s advisable to build a team of experts to support your investment journey:

• Buyer’s Agent: These professionals help you identify high-capital-growth properties with excellent rental yields, offering independent advice to prevent purchasing the wrong property.
• Mortgage Broker: A mortgage broker assists in securing the right home loan, ensuring that you negotiate lower rates and save money over the life of the loan.
• Solicitor: A solicitor manages the legal aspects of your property purchase, from drafting contracts to overseeing the property exchange, ensuring a smooth investment process.
• Property Manager: If you’re living abroad, a property manager can manage your property for tenants. Property management fees are typically a percentage of the weekly rental income, and maintenance costs should also be factored in.

Of course, you can navigate this process independently, but it may present additional challenges.

Do Your Research

Your investment strategy is pivotal to the success of your property investment. Consider whether you want to focus on high rental yield properties, properties with renovation potential, or those with strong capital gains potential. Conduct thorough research to find the best property investment for your specific goals.

Evaluate property values by comparing local selling prices, considering property type, land size, and amenities. This research is crucial to determine the true value of a property and make an informed investment decision.

Getting an Investment Property Mortgage

Once you have identified your ideal investment property, it’s time to secure your mortgage. You have the same home loan options as Melbourne citizens, including variable-rate loans, fixed-rate loans, and various loan terms, without additional interest rate burdens. However, lenders may calculate foreign income differently, so it’s essential to consider the impact of exchange rate fluctuations on your borrowing power.

Investing as an Expat

As an expat, your eligibility for home loans is largely similar to permanent residents in Australia. You can borrow up to 80% of the property value without paying lenders mortgage insurance (LMI). However, it’s important to note that some lenders may not offer home loans to individuals living abroad. Therefore, seeking assistance from a specialist mortgage broker is advisable.

Investing as a Foreign National

For foreign nationals, investing in Melbourne property is a slightly different process. It depends on whether you hold temporary or permanent residency in Australia:

• Permanent Residents: Those with permanent residency are not required to apply for approval from FIRB when buying property in Australia, even if they are purchasing jointly with an Australian citizen. The property can be established or new.
• Temporary Residents: Temporary residents face certain restrictions. They are typically not allowed to buy established dwellings for rental purposes, with new builds being the primary option. Approval for temporary residents may require application fees and additional taxes.

Conclusion

In conclusion, investing in property carries a level of risk, but in Australia, it is a risk often accompanied by consistent growth and numerous opportunities. With high demand for housing and a supportive investment climate, investing in Melbourne property, particularly at 111 High Street Melbourne, can be a rewarding endeavour.

For tailored guidance on your unique situation and to enhance your chances of securing the right mortgage, get in touch with our specialist expat mortgage brokers. They can help assess your specific circumstances and provide expert advice to facilitate a smooth investment journey.