In light of bizarre US events and the predictions of doom, we decided that this weeks topic would be on the viability of investing in the Australian economy.
We have stayed recession free for nearly 25 years straight and somehow dodged the global financial crisis and our recent growth rate came in at 3%, which was 0.5% higher than expected by expert economists.
Our unemployment rate is around 5.8%
Debt to GDP, according to Trading Economics is 33.88%, the US is at 102.98%, the UK 87.3%, Canada 87.66%, Germany 77.1% and Japan is at 229.2%.
Foreign investment into Australia helps us meet our economic potential by providing capital to finance new industries and enhance existing industries.
The higher growth supported by foreign investment pays dividends for all Australians and leads to increasing funds available to spend on hospitals, schools, roads and other essential services etc.
At end 2015, total investment flows stood at $424 billion, comprising approximately $348 billion in domestic savings and $76 billion in foreign investment.
Australia is a developed country and one of the wealthiest in the world, with the world’s 12th-largest economy.
In 2014 Australia had the world’s fifth-highest per capita income.
Australia’s military expenditure is the world’s 13th-largest.
According the credit suisse 2015 report Australia “wealth per adult” was $US 364,000.00
This places Australia behind Switzerland which leads average wealth at $US567.000.00 with New Zealand coming in number two at US$400,000.00.
Below is a screen capture showing the net worth of individuals in the higher income brackets.
Australia has one of the worlds largest middle class with a percentage of 66% of adults in the middle class.
One thing to remember is that the global wealth picture has been significantly affected recently by fluctuations in exchange rates.
The Global Wealth Report concluded that “the composition of household wealth in Australia is heavily skewed towards real assets, which average US$276,900 and form 60 per cent of gross assets.
This average level of real assets is the third highest in the world after Iceland and Norway. In part, it reflects a large endowment of land and natural resources relative to population, but it is also a result of high urban real estate prices.”
And we must be doing something right if “..With 1,480,000 people in the top one per cent of global wealth holders, Australia accounts for 3.1 per cent of this wealthy group, despite having just 0.4 per cent of the world’s adult population…”
The real estate sector represents the largest portion of all foreign investment types in Australia today.
Regulation of foreign investment into property is governed by the foreign investment review board. Non-resident foreign investors are not (see below)allowed to buy an existing home, but they can buy new homes and apartments or off-the-plan properties and vacant land.
Foreign people living in Australia for no more than 12 months can buy one existing home, but they must live in it and sell it when their visa expires
Now who are the foreign investors flocking to Australia to invest?
China is now by far the biggest foreign purchaser of Australian real estate, splurging $12.4 billion in 2013-14 – more than double the investment from the United States and triple Singapore’s outlay.
What many people do not realise is, countries like the Netherlands as well as New Zealand are also sending their capital here.
The real estate sector had a significant increase in investment approvals last financial year; 23,428 versus 12,025 a year prior.
Thats a jump of around 95% !
Foreign investment approvals for residential real estate was worth $34.7 billion.
Our elections are fairly boring compared to the United states..but at least we don’t riot when the “wrong” person becomes our Prime Minister.
All in all, we believe that Australia is one of the safest countries on the planet to invest in.
At Ample Property Solutions we cover across the board, for first time investors, new investors and even investors with one or more properties in their portfolio.
Contact us today, to find out how we can help you NOW