Looking at Australia’s Real Estate Portfolio
The upper percentage of Australia talk about property prices more than anything but there is a good reason for it: they have access to it more than the average Australian.
A recent Capgemini survey reveals that Australians with high net worth (those investing over $US 1 million other than residential properties) are more inclined to invest in property compared to other global or foreign investors. The wealthy are pouring more money into their property assets accounting for as much as 30.8% of their portfolio. This is as opposed to the 21.4% gathered from Asian investors. All across the globe, high net worth individuals devote around 18% of their portfolio to property.
The Australian Financial Review quotes Dipak Sahoo, Capgemini Australia director of financial services, saying: “Wealthy Australians think that property will give them the maximum return on investment.”
The director added: “”In the rest of Asia, real estate does not rank as highly because property prices have cooled off.”
What is interesting about the trend is that wealthy Australians are less exposed to shares than the rest of the global investors. However, the same focus on property investment may be creating more activities than ideal for the Australian real estate market. Even with the strong activity in the country’s east coast — pushing average property prices – the same figures are steering people’s attention away from the considerable disparity. Australia has yet to reconcile its best and worst-performing markets.
According to Smart Property Investment, Sydney’s booming market pushed the average property price beyond $600,000 in the last fiscal year. However, even with the growth, Australia’s struggling markets continued to experience a decline as Darwin fell 1.8 percent for the year while Perth fell 1.2% over the year. Australia saw around 9.5 million homes sold towards the conclusion of 2014. This is a 1.7% increase from the previous year.
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