Disclaimer: The following content is general information only. Readers should seek advice from a qualified Australian tax accountant or financial adviser regarding their specific circumstances before making any investment decisions.
For Australian expats living and working in Singapore, Hong Kong, or anywhere else the world has taken you — if you’re earning in a strong currency and keeping an eye on conditions back home, chances are you’ve asked yourself: where should I be investing for long-term wealth creation?
The Australian real estate market is currently displaying a paradoxical complexity. Demand is booming, fuelled by robust migration and a persistent housing shortage, but the spigot of new supply is being firmly squeezed. Building approvals are tanking, construction prices have skyrocketed and several projects have been put on hold indefinitely.
This supply-demand imbalance underlies a fairly positive view on Australian housing fundamentals. But it also turns up the heat on overseas buyers. It’s not only about selecting a state, but in securing a high-performing asset it’s about digging down to specific locations that have experienced prolonged economic growth. For expats based in Singapore, two places that are always on the radar are Queensland’s twin lifestyle powerhouses, the Gold Coast and Sunshine Coast.
But what market makes the most sense for your portfolio?
The Case for the Gold Coast: A Maturing City
The Gold Coast has long since shed its status as a mere tourist destination. It is now Australia’s sixth-largest city, with a rapidly expanding economy, huge infrastructural pipelines and a growing permanent population.
The basics of an investment property gold coast australia are driven by considerable civic investment. The Light Rail network continues to grow, the Coomera Connector is under construction and major health and education areas are being upgraded, all making the region more accessible and livable.
The Gold Coast is popular with expats for a mature market with significant liquidity and strong tenant demand. Rental yields are pushed up as vacancy rates here are still exceedingly tight. But as a more established market, the entry price point in luxury areas has climbed.
Investors here tend to play both ends of the board: obtaining solid rental cash flow in the short term and leveraging the city’s limited geography (sandwiched between the coast and the hinterland) to generate capital growth over the next decade.
The Case for Sunshine Coast: The Transformation Game
The Gold Coast may be the heavy-weight, but the Sunshine Coast is the quick-change artist. Once thought of as a string of sleepy beach communities, the area is now witnessing one of the most ambitious economic changes in the country.
The main impetus for a property investment sunshine coast is the size of the city development infrastructure underway. The Maroochydore City Centre is Australia’s first greenfield CBD development attracting large corporate tenants and producing thousands of high paid jobs.
The region is also moving towards a digital and knowledge-based economy, with the expansion of the Sunshine Coast International Airport and the laying of a new international submarine broadband cable.
The Sunshine Coast is a pure growth play for Singapore-based expats. The population is set to explode in the next two decades and the number of new, quality residences is straining to keep pace.
Yields might not always match the more densely populated parts of the Gold Coast, but the likelihood of strong capital growth spurred by huge infrastructure spending makes it a very appealing alternative for building long-term wealth.
What Expats Need to Know: Strategy and Compliance
Investing in property in australia while residing in Singapore requires careful structuring. Managing an asset across borders means that understanding your obligations is just as important as selecting the right suburb.
Good tax planning and knowing what methods to discuss with your accountant are important before you sign a contract. For example, a tax benefit relating to depreciation that is often ignored is available when acquiring a new or off-the-plan property. This can greatly reduce the keeping costs of your asset whilst you earn overseas.
However, any figures or estimates you see relating to the performance of property are for example purposes only and real results may vary based on particular circumstances. We meticulously assess property fundamentals, market analysis and developer due diligence.
Regarding how an asset interacts with your own financial circumstances, your expat tax specialist will advise on the most effective course forward.
Due Diligence is the New Currency
Today’s economic conditions necessitate a rigorous approach to choosing property whether you like the established buzz of the Gold Coast or the development potential of the Sunshine Coast.
Price is one consideration in a tight market. The true risk for offshore investors is not just the price of the acquisition, but if the project is actually developed to a high standard, on schedule and without compromising quality.
We’ve moved strongly into the area of intensive developer due diligence as property advisors. When we look at opportunities in either of these coastal markets, we look at the developer’s delivery capability.
Can they possibly get the product done in this climate? Can they afford to pay more for construction? Have they delivered on promises in earlier property cycles?
As a Singapore licensed firm governed by the CEA, we operate within a tight system of responsibility. We take the guesswork out of cross-border investing by becoming your boots on the ground, sifting the noise and serving only the assets that pass our stringent fundamental assessments.
Both the Gold and Sunshine Coasts offer great options, but choosing the best one will come down to your timing, budget and broader portfolio goals.
Reach out to Property NXT Australia to find out which market is the best fit for your strategy. Contact us today and let’s have a candid conversation about your next strategic acquisition.
