Australians cautioned on overseas property
Investing in overseas property can be fraught with peril given that many Australian investors who may be considering the move do not understand the market from a demand perspective, riskwiseproperty.com.au CEO Doron Peleg said.
Peleg’s comments follow research by international money transfers group, WorldFirst, which revealed half of all Aussies would consider investing in property overseas if it was cheaper than in Australia.
“While it may seem like a good idea at the time, investing overseas is quite a perilous exercise mainly because, unless you know the place or have family living in the country, you don’t know the local market, especially from a demand perspective,” Peleg said.
“It’s only the local people who know if an area is really popular and has high demand or vice versa.”
Also, Peleg said Australia was, in general, highly regulated with many controls in place, including when it came to valuations, to protect buyers, which might not be the case in other countries.
“Also, if you buy a property here you know, or at least you should know, what its fair market value should be but overseas you don't. You don’t know the banks and you don’t know the valuators,” he said.
“RiskWise’s advice to investors is if they must purchase overseas, to at least try to stick with existing properties as opposed to off-the-plan, which carry a lot higher risk especially if there is a danger of oversupply in the area.”
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