The country’s highly priced property market is a common point of discussion in financial advice in Australia, which has remained expensive, particularly in Sydney and Melbourne, in spite of about 18 months worth of sharp price drops in the market.
Global investment bank Morgan Stanley, as well as other financial firms like Domain, noted how Australia’s two most populated cities sit in the world’s five most expensive cities; a nine-bedroom 13th century chateau in Eastern France is, reportedly, more affordable than a Sydney two-bedroom apartment.
On top of that, another common issue that financial advice in Australia brushes up against is the fact that the cost of borrowing money to purchase a property in the country is more expensive compared to other global property hotspots, like America, Hong Kong, and Canada, in spite of the cash rate sitting at 1.5% for 33 months.
Managing Director Brett Evans, Atlas Wealth Management, a specialist in expat financial advice, reports that, as a result of the country’s high property prices, an Aussie leaves the country to live overseas as an expat every minute and 49 seconds, which generally means that they work for about 3.5 years in lower taxation countries, like Dubai or Singapore.
He says that expats may get accustomed to a higher pay and lower tax lifestyle, then come back to Australia a few years following, with little financial gain to show for their ventures. Alternatively, he notes, expats tend to invest in properties, build capital, and have an asset that they can then sell or leverage when they go back to the AU. Some, meanwhile, invest in residential properties in the US while staying locally.
With Australia’s property prices, a person could, realistically, get a two-bedroom, two-bathroom apartment in Sydney with a budget of $1.5 million. For comparison, a renovated 13th century chateau with 7,500m2 of parkland, a main house of 450m2 of modernised living areas, which include nine bedrooms, and a 400m2 vaulted cellar, will cost approximately $1.2 million.
Another popular destination for Aussie expats is Dubai, where a two-bedroom, three-bathroom apartment sits at around $1.4 million in value.