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Education and Property

Accommodation is a big issue when studying in Australia, most of Chinese students tend to rent properties when studying in Australia, is it really a good idea? Let’s compare the pros and cons of buying and renting to find out which way works better.

1. Rent or buy a home

If international students choose to rent a home in Australia , even if they may just rent a single room from a property, he still pays tens of thousands of Australian dollars for rent till he finish his course.

A typical house in Australia, with front and backyard and private parking, may costs less than 700,000 Australian dollars in Australia. Buyers only need a down payment of 20% and the rest can be covered by mortgage. Applying for mortgage and purchasing properties in Australia is convenient and the interest rate is not high. Compared with China, income in Australia can cover repayment much better.

Instead of paying rent for years and own nothing afterward, purchasing a home seems to be more rewarding. Think about the property value appreciation and permanent home ownership.

2. Easy to be an“International landlord”

If students choose to retain ownership of their property after return to their home country, they can entrust real estate agents to manage their property and be an “international landlord”.

Vacancy rate in Australia property market is very low (Australia housing vacancy rate is about 0.6%). Rental return is considerable with residential return around 4 to 5 per cent per annual. Rental return is stable since real estate agencies are governed by professional code of conducts and regulation.

3. Potential Resale Return

People may think buying a property may be a good idea only if students intend to stay in Australia. That’s not the whole story.

Even if the owner is overseas, their properties can benefit them in two different ways: rental return and resale.

According to the statistics, Australian real estate property appreciates for nearly 40 years with price double in every 7-10 years. The average annual growth rate is about 10%. In other words, if a student sells his property before leaving Australia, he may potentially earn 100,000 Australia dollars given he holds his home for at least three years.

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Migration and Investment

Australia has traditionally been a safe place to invest in property. Population growth, rising incomes and a strong rental demand are key contributors to positive investment returns in Australia.

On its own, Australian property investment cannot guarantee automatic residency under the various migration programs, however such investment will certainly have a significant and positive impact in the assessment of visa applications.

Whilst ownership of Australian property would be a consideration for any visa application it may particularly be a distinct advantage to the following visa applicants.

1. Business Owners and Investors

Under the Business Skills migration program, overseas business owners and investors are encouraged to bring their knowledge, experience and capital to Australia to establish or manage an existing business, or simply invest in its resources.

Ownership of Australian property will certainly underpin your commitment to establishing a solid investment base in this country. There is no doubt that to own assets in Australia, particularly property, indicates a seriousness about settling here and is evidence that you will have no difficulty establishing yourself in Australia. This is one of the criteria for a successful application.

The temporary Business Visitor visa will allow you to visit Australia to inspect properties with a view to investing in them, or to personally inspect properties already owned and check on the management of the properties.

Most Business Skills visa has pathways to permanent residency. Initially, you enter Australia on a provisional (temporary) visa for 4 years and, after satisfactory evidence of a specified level of business or investment activity, you may then apply for permanent residence.

2. Self-Funded Retirees

The Business Skills program also caters for self-funded retirees who would like spend their ‘golden years’ experiencing our very relaxed lifestyle, but returning to their home base in their ‘twilight years’. The Australian Government is keen to attract this type of resident, albeit on a temporary basis.

Although a strong net asset base is a mandatory consideration for assessment, Australian property ownership can be counted towards meeting this criterion.

3. Students

In most student visa applications evidence is required of the financial resources of the family from which the student comes before a visa will be granted. The ownership of property in Australia would again strengthen your application, particularly if it is property in which you can be accommodated or if the income from it could be used to support you while studying here.

Recent changes in legislation have allowed students (who are on a student visa for a minimum 12 months) to purchase property without a limit on its value, thereby allowing you to invest in the more desirable growth areas.

Parents who also invest in properties are demonstrating a commitment to support their children in a safe environment.

4. Student Guardians

This is included in the Student visa program, which is the provision for a parent, or close relative, to accompany their child student (under 18 years) to Australia under the popular Student Guardian visa.

As the Australian Government will be most concerned about where the child and guardian will live, the purchase of property will have a very significant bearing in the assessment of visa applications.

5. Skilled Workers

Australian property ownership is generally not a requirement for this migration program however such an investment can only strengthen your application.

This is just a snapshot of the Australian immigration system where Australian property investment may be of significant consideration.

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Invest in Australia

Invest in Australia

Australia is one of the most cultural diversified countries in the world; according to Australian Bureau of Statistics, almost a quarter of its population was born overseas. The labour force in Australia makes up of people from different cultural and linguistic backgrounds since its migration policy absorbs immigrants from all over the world. The economic and institutional environments allow investors to enjoy the following distinguished advantages:

1. Stable Investment Return
According to Australian Bureau of Statistics, the house price in Australia doubles every 7-10 years and it can be verified by the records in the last few decades. Purchasing real estate properties has become a major means of investing in Australia; besides from the possible return in asset value, the merit of rental income also makes the investment rewarding and easier to apply mortgage.

2. Highly Regulated Real Estate Industry
Australia has strict regulations governing real estate agency industry; employees must have licences to practise and they are subject to auditing every year. Typical participants in this industry include sales executives, lawyers, investment advisors, valuers, accountants, brokers and etc. Majority of them have at least bachelor degrees and speak more than one language. They are well aware of professional ethics and have good self-discipline.

3. Active Financial Service Industry
Financial service industry is one of fastest growing industry in Australia and it maintains the growth rate of 5.3% since 1980s. According to Forbes, Australian Funds Management Industry ranks number four in the world and the total amount of managed fund has exceeded USD$51.7 billion now. The stability and degree of regulation of Australian banking industry rank number two in the world while the quality of service ranks number three. The highly developed, stable and circulated financial market makes Australia one of the hubs for Asia-pacific capital flows.

4. Pleasant Living Environment and the World Best Resource Supply
Australia is deemed as a fortunate country since it has abundant natural resources which include minerals, natural gas and etc. Sydney and Melbourne always rank top in the most pleasant living cities comparisons. It has the most comfortable climates, unique and beautiful environment, highly developed society and infrastructures; it is one of the most liveable countries in the world.

5. Sophisticated Welfare and Security System

Australia offers free medical and education to all citizens and permanent residents; people from all social classes can enjoy the welfare and security system.

6. Open while Efficient Regulation and Relaxed Environment for Business Startup
Australia provides the most ideal environment for investment and business development. It takes the simplest procedure for business startup and the institutional processing can be completed in two days. Investors can have more control over its investment since the business and institutional environments enable better predictability and stability.

7. Time Zone
Among all the financial hubs, Australian stock market opens first in the world every day, and it fills the time gap between US and Europe trading hours. Also, the time differences between Australia and other Asian financial hubs, like China, Singapore, Hong Kong and Malaysia, are only 2 to 3 hours; thus Australia can almost provide instant service to Asia clients and the visitors from Asia will has less hassle in dealing with jetlag.

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