Australia, the Lure of Oz
The land to buy Down Under.
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A country that doubles as a continent, Australia has a lot of land to go around and comparatively few people: It is approximately the size of the United States, but with only 20 million residents. And several events over the last few years have conspired to make Oz—as Australia is sometimes affectionately called—a luring destination for overseas investors.The 2000 Summer Olympics put Sydney, the capital of New South Wales, on everyone’s television screen. According to Realtor Ken Jacobs, an affiliate of Christie’s Great Estates, the spotlight on an international city with a moderate climate, friendly people and an easy lifestyle suddenly magnified its attractiveness for foreign real estate investors. And many Australians living abroad were reminded that this was home and wanted to come back.
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A view of Cradle Mountain in Tasmania. (Click image to enlarge)A year later, the 9/11 attacks underlined the appeal of Australia, which, like New Zealand, seemed blissfully far away from the dangers of terrorism. "Australia is a safe location with political stability," notes Jacobs, a Sydney native who has been specializing in real estate there for about 20 years. "A lot of Americans feel comfortable here—they feel a synergy."
By 2002, the real estate market was booming, a trend that continued in 2003, influenced in part, Jacobs says, by a weak currency. In 2002, he sold the Boomerang house in Sydney for a record A$20.7 million (US$15.5 million)—the previous Australian price record was set at A$19.2 million (US$14.4 million) in 1988. Since the sale of Boomerang, more than a dozen homes have sold in excess of A$20 million (US$15 million). "It was like Roger Bannister breaking the four-minute mile," says Jacobs. "Once the record was broken, many others followed."
The Australian dollar has since strengthened and sales have slowed in the last couple of years. But the prestige areas have remained strong.
As desirable areas go, first and foremost, the interest is in Sydney, where views of the country’s most recognized icons—the Sydney Opera House and the Harbour Bridge—add premium prices to any property. Foreign investors want to know they are in Australia, according to Jacobs, and that means being able to see the famous landmarks outside their windows.
Other regions with great appeal are in Queensland, whose capital, Brisbane, is flanked by two well-established resort destinations: the Gold Coast to the south and the Sunshine Coast to the north. Beyond that, North Oueensland, an area of great natural beauty opposite the Great Barrier Reef, is also quickly developing from Port Douglas, just north of Cairns, down past Townsville to the Whitsunday Islands.
All these areas have large airports and an increasing roster of new serviced apartments and beach and golf developments—the kind of property that is particularly important for offshore investors, not only because lifestyle is one of Australia’s great selling points, but also because of strict governmental restrictions. (See the sidebar on the Foreign Investment Review Board.)
Sydney and Environs
An amazingly livable international city with access to world-famous beaches, Sydney is everyone’s first stop, and the top of the list for real estate investors. Increasingly popular is the trend to convert old docks around the city’s crystal-clear bay into luxury apartments. In 2003, actor Russell Crowe sold his A$11 million (US$8.3 million) home in Elizabeth Bay and spent A$14.35 million (US$10.5 million) on an apartment in the renovated dock area of Woolloomooloo Bay, which, in addition to apartments, has restaurants, retail shops and Taj’s Blue Hotel.
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