Here’s a bit of news for you if you’re looking for just one more reason to get into the real estate investing business here in Oz….
If you’re not going to buy that house or duplex or block of flats today, some Chinese investor just might buy it tomorrow!
At the moment most of the buying is focused on Sydney. But if you’re one of my students, you know that this will soon change…
But let’s take a look at the Sydney market to understand what’s really going on.
Sydney housing prices are breaking through barriers like never before and for good reason. You already know that credit remains tight, which means that banks still aren’t lending the way they should be to construction companies and Aussie homebuyers alike.
So where does that lead us? Directly into a housing shortage, which is what we have in Oz right now, and in particular, Sydney and its surrounding area. But add in a flood of Chinese investors and what do you have?
The perfect real estate investment storm!
Right now we’re seeing a hurricane of demand as property-hungry Chinese investors with stacks of cash are buying property outside of China…and especially in Australia. Well, you know that a shortage of properties and an oversupply of cash can mean only one thing: rising prices.
And that’s what’s happening in Sydney at the moment. Prices are headed skyward!
The level of Chinese demand is at a level that’s never been seen before. In fact, in some areas of Sydney, almost all the buyers are Chinese, even in established markets. This is unprecedented, as is the 75 per cent rise in Chinese real estate investment from 2010 through 2012 in Oz.
Only the U.S. and Singapore are buying more real estate than the Chinese…for the moment.
There’s a pretty good reason for that surge in foreign real estate investment…a couple of them, actually.
When the GFC hit, the Australian government loosened the rules for foreign investors. Previously, foreign investor could mainly buy new homes in Australia and only up to 50 per cent of any off-the-plan flats on offer. Foreign access to the established home market was even more limited. That changed in 2009 and 2010 when the rules were relaxed to help the Aussie housing market…
But what began as a trickle of foreign demand in 2009 has turned into a raging flood in 2013…
And here we are! Some estimates see Sydney housing prices gaining 12 per cent by the end of 2013.
Now to some, this sounds like a real estate bubble waiting to pop. But it’s much less about a bubble than it is about pent up real estate demand. Houses just aren’t getting built fast enough or in enough numbers to meet domestic demand. Adding in the rising foreign demand only makes the shortage worse!
Another contributing factor is the entry of self-managed superannuation funds (SMSFs) into real estate investing. Even though it is only a fraction of the entire $4 trillion property market, the share of properties in SMSFs is growing rapidly.
But there also happens to be a bit of Chinese politics driving so many Chinese investors to Australia at the moment. The new Chinese government has said it wants to reform the banking system and track assets and loans much more closely than it has in the past…
In other words, there may well be a tightening of the screws in China’s business community. Loans and investments may not be as easy to come by or to profit by as they have been the past decade or so.
It’s easy to imagine why so many Chinese are now looking to move some of their money outside of China and presumably out of reach of the new government and its new laws.
Even if you don’t live in Sydney, it’s still great news for you….
After Sydney gets saturated with foreign investors, the pressure will rise on other areas more than it already has. In fact, across the nation, the level of foreign buyers into the housing market is up by 12.5 per cent over the past two years. This proportion is only going to increase for the next couple of years at least.
This means that foreign investors, including the Chinese investors, will be buying properties all over Australia. You don’t have to be in Sydney to benefit from this surge in the property market, you just have to be in the market.
I could go on, but you get the point. The real estate market is here to stay. If you are not investing in the market because you don’t know where or how to start, the place to start is with iLoveRealEstate.tv. Thousands of my students have done very, very well in real estate investing and I expect thousands more will do so as well.
The only question is, will you be one of them?
The great news is that if you want to be successful in real estate investing, you can. You just need to be prepared. Just as you don’t walk into a dark room without turning the light on, you don’t get into an investing area that you’re not familiar with without educating yourself first!
It’s not rocket science, but there is a bit of science to it. But happily, it’s the kind of science that puts you in control of your own destiny…while having a bit of fun and meeting some like-minded people along the way. (I wouldn’t do this if it wasn’t fun.)
So what’s you’re first step?
Come to a Seminar! Attend a Boot Camp! Get yourself educated!
If you’re like most people, you’ve told yourself that ‘someday you’ll make a difference in your life.’ Well, when you look at what’s happening in the Aussie real estate market, you’ll know that now is the time to do it.
Today is that day.