$5 Million may gain permanent resident status or citizenship in Australia
$5 Million may gain permanent resident status or citizenship in Australia
We're about to head into the Year of the Snake which indicates we are destined for steady progress and attention to detail.
It is expected that Chinese and other foreign buyers will be involved in the recovery of the Australian property market and in particular the prestige sector this year as all the indicators show.
There are strong indicators that the top end of town is going to lift this year due to the introduction of the "Significant Investor Visa" which appears mainly geared towards the Chinese, where $5 million placed in “Endorsed Investments” is a method of gaining permanent resident status or citizenship.
Launched before Christmas, it looks set to allow 700 wealthy investors into the country with the potential of raising $3.5 billion worth of investment in the Australian economy.
The top end of the residential market has been intriguing to watch over recent years to say the least.
In 2008 when all asset classes, including property were dropping there were more sales over $20 million than any other.
Sixty per cent of these sales took place in the four months after the collapse of Lehman Brothers and the prices of these $20 million-plus properties were higher than what could have been achieved in 2007.
The number of prestige sales dropped off soon after - particularly in the financial year to July 1 last year but there were genuine offers from extremely financially capable buyers in the $20 million, $30 million and $40 million brackets not long after.
The past 20 years appears to have been an aberration driven by debt, which resulted in extraordinary capital gain in all asset classes.
It appears we are now going back to an equity/savings driven environment with an aversion to being too highly geared has returned. The end result may be more realistic capital gain but still a solid reason to acquire property.
While improvements in the share-market results in an increased monetary flow the major effect is an increase in buyer confidence and lack of confidence has without doubt had the most damaging impact on the prestige market.
Many clients are cashed up so as confidence build more buyers will act and activity in December and January certainly suggests this will be the case as we have increased interest from buyers wanting to purchase, and in particular offshore interest.
The impact of Chinese buyers on established property has only been demonstrated since the introduction of the Significant Investor Visa, or 888 Visa, so Chinese buying activity is sure to increase this year.
The high Australian dollar is not impacting on the established prestige homes market, this is partly due to the international perception that Australia has a strong economic future, many lifestyle advantages and is strategically positioned in the Asia Pacific region.
