Brexit not all doom and gloom for Aussie property
Britain’s recent exit from the European Union has sent shockwaves throughout Europe and the international community. Since the UK referendum, we have seen an immediate hit to global economic markets, creating a volatile climate as they adjust to these political changes. There is much speculation as to how markets around the world will respond over the coming months.
Here in Australia, many are wondering how the event may impact our local property market. While no one can say with any great certainty what the outcome will be, there are a number of characteristics about our property market that may hold it in good stead for the days to come.
As British and surrounding European markets encounter chaos and confusion, I believe the Australian market will maintain its credibility as a safe location for international investment. The US and UK are already amongst our top foreign investors, and it is likely Australia will become even more appealing due to its continued stability and the strong yields that can be attained in the Australian market compared to many international counterparts.
In combination with this, there are other reasons why the Australian market will continue to show resilience to international economic or political shocks and remain an attractive destination for foreign and domestic investment.
Firstly, the Australian market has weathered the storm of many previous international shocks and maintained its strength. Any short-term market falls have often been followed by strong rebounds. Australia’s property market did not experience a ‘significant decline’ during the GFC and amazingly, the wider economy avoided a recession during this period. The strong economic management and security of our country helped support the resilience of the property market, and this is attested to by our AAA credit rating.
Demand for Australian property may also be supported because of the simple fact our country is a wonderful place to live. The Australian lifestyle is renowned for a fresh, relaxed atmosphere that emanates a natural appeal to locals and foreigners alike. Our climate is the subject of international envy as we enjoy warm, sunny summers and moderate winters. Our cities are not overpopulated or excessively polluted. Many Australians have access to both the beach and the bush. I could go on and on, but I’m sure many would agree that Australia’s appeal is undeniable and many international citizens will have the country high on their lists of places to live or to immigrate to.
Whilst I do not have a crystal ball to accurately predict how the effects of Brexit will play out in Australia, I am confident the property market will remain a safe investment over the long term.
Charles Tarbey is Chairman and Owner of Century 21 Australasia