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Middle Eastern investors are increasingly looking at Australia as a destination to expand their real estate portfolios, according to property investment firm IP Global.
A stable economy and strong population growth continue to underpin the property markets in leading cities such as Brisbane and Melbourne. Australia's economy expanded by 2.3 per cent year-on-year in the first quarter of 2015, while its population grew by 1.5 per cent in the year to September, according to Australia Bureau of Statistics.
IP Global explained that for many buyers in the Middle East, Australia is a convenient and familiar destination for investment.
Easy to invest
''The level of interest in Australian real estate from investors in the Middle East is on the rise and it's not hard to see why,'' said Paul Preston, Director, Head of Europe, Middle East and Africa at IP Global, which has offices in Dubai and Abu Dhabi. ''Investing in Australia is a relatively straightforward and clear process.
''In terms of fundamentals, a rising population and big infrastructure spending programmes support the outlook for real estate returns in areas beyond the more well-known, traditional investment locations.''
The firm's latest quarterly Global Real Estate Outlook report states that while signs indicate that prices are overheating in traditional investor hotspots such as Sydney, pockets of value exist in the suburbs of Brisbane and Melbourne. With population growth forecast at 34 per cent this year onwards until 2031 and A$134 billion (around Dh367.6 billion) tagged for infrastructure investment in the state of Queensland, real estate in Brisbane stands out in terms of value.
The city's median unit price reached A$422,000, a rise of 3.6 per cent in the year to December 2014. With a shortage of housing stock across Brisbane, further price hikes are anticipated, with forecasts putting growth at 5-8 per cent this year.
IP Global added that towards the south of the country, some of the fringe suburbs within 10km of Melbourne's central business district should be a key focus area for investors.
Apartment prices in Melbourne rose 5.2 per cent in the year to March, while the city's low vacancy rate of 2.1 per cent is keeping yields at a healthy average of 4.1 per cent. A 3 per cent surcharge on stamp duty for foreign nationals in Victoria took effect at the start of July, but Australia remains one of the most straightforward markets for overseas investors. Melbourne's fundamentals continue to indicate excellent investment potential.
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Source: Property Weekly