I don’t really believe people really understand how lucky we are in Australia. I have traveled all over the world seeing poverty in its extreme, corruption at its worse, and life at its cheapest. Yet I still receive comparisons of how much the Sydney median house price could purchase a French Chalet or a Caribbean island in newspapers. I understand that these ‘articles’ are clickbait but the level of buyers’ frustration through auction results has given a real sentiment that people feel that houses are expensive and they are paying too much for a property.
Australian property is undervalued. “Blasphemy!!” they would yell as housing affordability acolytes would drag me through the streets to the gallows. The issue at its core is people judge themselves based on the people and things happening close to them.
Economic Stability
Australia is an economically stable country with AAA sovereign rating. It is resources rich and equipped to bounce back from any global financial crisis. Buying bonds and large government infrastructure projects are usually the go-to response for governments and central banks around the world. These projects need iron ore, copper, and raw materials to fuel their recovery. Other countries will fund Australia’s recovery through raw material purchases.
Construction
Australia’s beating heart is construction. According to the latest RBL Crane Index Report Sydney topped out the crane count in Australia with 299 Cranes in Q1 2021. With 677 total cranes in Australia. In North America which includes both Canada and the US. A total of 415 cranes were tallied across the entire continent. A country with a population of just over 25 million compared with a continent with over 360 million people.
Politically Stability
Australia is politically stable, a change in government rarely results in drastic changes in Australian way of life. There are no military coups, there is never an unlawful land grab. The rule of law stands firm in Australia with the ‘Aussie Battler’ as its mascot and “A fair go!” as its motto. Corruption is minimal at its worst and stamped out when it comes to light.
Australia’s safety net for our people who have fallen on hard times cushions the harshness of life and protects the integrity of the family unit avoiding a chain reaction in circumstances to flow-on to the next generation. Where else in the world do you have industrial relations courts, Medicare, and job seeker-maker-keeper?
Tax Policies
Australian property is not only used as a dwelling but the key driver of wealth creation through secured property rights and favourable tax policies. As a rule of thumb, Australian property prices double every 7-10 years, tell me another country where you can double your property wealth by doing absolutely nothing. It is the reason why Australia ranks so high on international wealth indexes.
In your own home, there is no capital gains tax when you sell. The Point Piper estate Fairwater which sold for $100 million will attract annual council rates of $37,150.05 for the 2020/21 financial year ($633 base fee + $0.00043733 x Land Value of $83,500,000). Jay-Z and Beyonce’s $88 million compound in Bel-Air attracts over $1.05 million in taxes a year.
Environment
Australia’s climate is quite mild, we are prone to droughts, floods, bushfires and tropical cyclones, but free from earthquakes, volcanos, tsunamis and prolonged sub zero temperatures. We have amazingly clean beaches, beautiful natural wonders, and vibrant cities.
Crime
If we look at Australia’s homicide rate when compared with similar democracies. It’s consistent with the UK which in the last study conducted in 2012 showed 1 per 100,000 persons compared to 1.1 in Australia. The US was the most dangerous compared at 4.7. Australia is much lower than the global homicide rate of 6.2 per 100,000 which was estimated by the United Nations Global Study on Homicide report. Countries with the highest homicide rate in 2012 included Colombia (30.8), Mexico (21.5), and South Africa (31).
Median House Prices around the world
Sydney, Australia: AUD $1,112,670
New York City, USA: AUD $1,106,629
Los Angeles, USA: AUD $919,945
Mexico: AUD $74,032
London, UK: AUD $919,322
Cape Town, South Africa: AUD $597,893
Where else can you find a property that doubles as a wealth creation vehicle, in an economically and politically stable country with low crime rates, strong health and social security network with a very comfortable climate?
It’s easy to forget what we take for granted everyday especially when we don’t see what others don’t have
Alexander Gibson