The long view in Australia

By THE STAR

AUSTRALIA’s property market is a platform for long-term wealth-building strategy, according to Melbourne-based property investment and finance solutions specialist ResCom Group.

Co-founder and managing director Leonard Ng says investors should view the fundamentals of Australia being a developed country that provides financial stability with overall long-term growth and property market liquidity.

“While Australia is considered a well-regulated country, where consumers and investors are protected, this should be one of the drivers for them to invest in properties here,” Ng told StarBizWeek in an interview recently.

He says in the present soft market environment, investors need to understand the risks and challenges, and align their expectations to what Australia has to offer in the current situation, before making a decision.

“It is important to realise that investing in Australia requires long-term investment strategy.

“There is no quick fix. In its very nature, the country’s property market offers long-term but sustainable growth opportunity,’ Ng says.

He is advising investors to invest in property classes that appealed to Aussies, as the locals were the ones to buy from them in future.

Ng says the weakened economy may result in weaker Australian dollars (AUD) and development and construction activities were expected to remain bullish off the back of the strength of property sales generated last year from foreign investors.

According to Australia’s CBRE global Research and Consulting team, more pressure is expected on AUD going forward, but it holds the view that 80-90 US cents is the likely band of trade.

“Cyclical improvement from Europe and higher rates in the United States will pose medium downside risk to the AUD from its current level,” it said, adding that the implications for property are mixed, but saw lower AUD as supportive of domestic retailers from a sales volume perspective (but may also increase cost of imported goods).

“With the rising number of Chinese investors (from China) entering the market with landmark acquisitions coupled with the support of the Chinese government to diversify into more developed countries such as Australia, US and United Kingdom, the property development segment is likely to rise, particularly in locations that appealed to Asians.

“Although the local Aussies have raised concerns of being squeezed out of the market by the foreigners, Australian properties are comparatively affordable to its Asian neighbours,” Ng says.

He observes that the preferred locations include Melbourne, Perth, Brisbane and Sydney, noting that as long as foreign investors are buying and Australia’s infrastructure policies appeal to investors as and that foreign banks are willing to lend, the demand would still exist.

– Malaysia Real Estate News

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