Australia is the most transparent country in the Asia-pacific property market, ranking second globally just behind the UK, according to the latest Global Real Estate Transparency Index 2018.
The top 10 countries in the report were the United Kingdom, Australia, the United States, France, Canada, the Netherlands, New Zealand, Germany, Ireland and Sweden.
In this ranking, the Chinese mainland market is at the critical point of promotion from semi-transparent market to transparent market, ranking 33rd in the world.
The following shows the top 20 countries in the 2018 real estate market transparency index and their index scores:
The global real estate market transparency index is edited by JLL and published once every two years, through the evaluation of the listed company governance, legal, regulatory environment, transaction process and market openness and a series of indicators, analyzing the data of 100 countries and regions of the world's real estate market transparency, and classifying these countries and regions into five level of transparency, highly transparent, transparent, translucent, respectively, low transparency and opaque.
The director of the report noted a strong link between market transparency and cross-border investment activities. Market transparency is another key factor that people choose to invest in Australia in addition to economic diversification, strong population growth and good market fundamentals. Australia has attracted large foreign capital inflows with its solid economic fundamentals.
Since 2012, JLL has released data showing that the total value of Australian overseas investment in real estate projects has exceeded 56.3 billion Australian dollars. Commercial real estate, such as office and retail and so on, accounted for 33.2%.
Transparency is becoming more and more important in real estate investment. As more and more capital is invested in the real estate market, investors are demanding more and more transparency in the real estate market.
In addition to the high market transparency, Australian real estate market also has the following advantages:
Stable economic environment
First of all, Australia has a good economic resilience. Even under the global economic crisis, there is no economic recession. Australia is one of the few countries in the world that always maintains price stability without inflationary pressure.
For investors, it is important for a country to have a stable economic environment, which determines the level of market risks. The Australian real estate market has maintained a steady growth for many years.
According to RESIDEX, property prices in Australia have a growth cycle of every 10 years for the past 30 years, meaning that property prices have doubled every 7-8 years. And the average annual rental return of 4-7% is easy to maintain with rent, house price and rent both continue to increase income.
Continuous population growth
The population of Australia is developing rapidly. In the past year, the population of Australia has increased by nearly 400,000, which is like adding a city as the size of Canberra. Most of the new residents are reported to be in Australia's four biggest cities: Melbourne, Sydney, Brisbane and Perth.
In the decade between 2006 and 2016, the population of Melbourne increased by nearly 1 million, according to the survey. Sydney was not far behind, adding 800,000 people. Over the same period, the populations of both Brisbane and Perth both increased by nearly half a million people.
Australia's infant birthrate has been higher than that of other developed countries since 2017. According to experts, Australia's infant birthrate has reached a peak, with one baby born every 1 minute and 43 seconds on average.
Currently, Australia is adding one person every 83 seconds. According to previous projections, Australia's population will increase to 36 million by 2046, including 7.3 million in Melbourne, 7.4 million in Sydney, and the population of Brisbane and Perth will double to 4 million.
Standard housing operation market
The Australian government has strictly regulated the qualification of personnel engaged in real estate industry, including lawyers, agents, brokers, etc. The professional personnel engaging in real estate activities must have a certain degree, corresponding practice experience, and pass the examination to issue qualification certificate, after registering, then can be practicing, which is very standard.
Australia has the most perfect system to protect property owners, whether buying or selling houses or renting management. For overseas buyers, the clear and transparent operation market ensures the security of investment, and buyers do not need to worry about themselves, and can fully invest overseas without leaving their homes, which is safe and assured.
New homes have low down payments and flexible portfolios
Australia is very attractive to overseas investors because of its low down payment, flexible asset portfolio, small investment risk and sufficient financial leverage. A low down payment of 10 percent makes the vast majority affordable. Compared with stocks, funds and so on, real estate is the most stable investment project.
In addition, Australia's property market is subject to strict national regulation, and buyers are protected in many ways with less risk. It is mainly reflected in the following aspects:
Proper division of duties
Australia has a short history and a rigorous system, which is reflected in all fields.
For example, the bank undertakes market risks independently and guarantees that it can objectively assess the property value and market risks when providing mortgage loans and avoid financial risks and excessive investment; Relevant government departments shall have the responsibility for all kinds of necessary information examination and approval, and relevant procedures shall be made public simultaneously. The developer shall carry out construction in strict accordance with the approved scheme, and the final approval documents shall be incorporated into the contract of house purchase by the owner and subject to public supervision.
In this way, the interests of the unity are avoided and buyers are greatly protected.
Force lawyers and intermediaries to intervene
Buying and selling property in Australia must be done through a qualified intermediary, and a lawyer must be involved in the whole process.
The purchase contract in Australia involves various professional knowledge. Generally, the owner or sales personnel cannot fully grasp it. Both parties must have a lawyer, even if without the factors of contracts, it is compulsory to purchase the building through the lawyers. In this way, the owners do not have to worry about illegal operations.
The down payment is deposited in an independent trust account
Overseas people are most concerned about the safety of the down payment when buying the building, which can be fully assured in Australia. Australia's first payment is required by law to be deposited in a trust account jointly supervised by lawyers and the government. Neither developers nor buyers can use the money.
The buyers can pay the rest of the price after settlement and inspection. That is to say, the developer can obtain money only after the house settlement. If the developer goes bankrupt, the government will return to the client with 10% down payment and interest, which is high security and guarantees the most basic interest of every client.
High transparency of the market, perfect laws and mature management regulations... above-mentioned factors are the conditions guaranteeing the healthy and stable development of Australian real estate market.