Perth to profit from overseas funds after Brexit and NSW, Victoria property taxes: Raine & Horne
The Brexit result in the United Kingdom, coupled with additional real estate taxes to be levied on foreign buyers in NSW and Victoria, will likely make Perth more attractive to overseas investors, according to leading real estate group Raine & Horne.
Paul Curran, principal of Raine & Horne Rockingham Beach, believes the decision by the UK to leave the European Union following the referendum will prove to be good news for Western Australian property markets.
“The combination of a lower Australian dollar, property affordability and Perth’s proximity to Asia is already a plus for foreign investors,” said Curran.
“The decision by the English to leave the EU has also created financial market instability, which will encourage more foreign investors to seek safer asset havens such as Western Australian real estate.”
Curran said the so-called Brexit vote followed hot on the heels of the decisions by the NSW and Victorian state governments to hike up stamp duty imposts on foreign buyers.
The NSW government has imposed a 4% stamp duty surcharge on the purchase of residential property by foreign purchasers that commenced from Budget day, June 21, and a 0.75% land tax surcharge on residential real estate owned by foreign persons commencing in the 2017 land tax year.
As of this month, Victoria will have a 7% foreign investor surcharge on residential stamp duty and 1.5% surcharge on some land tax.
Curran said the new taxes will encourage foreign buyers to consider property markets such as Rockingham Beach longer-term, where it’s possible to secure quality real estate, which is priced well below the median prices in Melbourne and Sydney.
In Perth, the median dwelling price is $506,000, according to CoreLogic, compared to $782,000 in Sydney and $590,000 in Melbourne. In the city’s south west, median house prices in Rockingham are $448,000 and $330,000 for apartments.
“It is early days for the Brexit decision, and foreign buyers are just starting to absorb the longer-term ramifications of these additional taxes in the eastern states,” said Curran.
“Excluding the new taxes and the Brexit result, we expect to see more foreign capital finding its way to Perth, with our affordable real estate prices very popular with overseas buyers.”