With interest rates at an all-time low and the equity markets being jittery, the upsizer’s appetite for the prestige property market has resurfaced on its own.
“Local prestige buyers are talking about expected changes to super and acknowledging they’ve had a great run, but now they need to reposition their cash investments,” said Tim Foote, principal of Belle Property Mosman. “Investing in a larger principal place of residence over shares is a good strategy because we’re due for some prestige price growth and the capital gains are tax-free.”
At the moment, upsizers are making up a large part of the market for prestige properties. A survey done by Knight Frank called ‘The Wealth Report’ found out that one of the main concerns of local Australians with ultra-high net worth was legislation that might affect them, like the proposed super changes. It is also forecasted that the prestige property market in Sydney will experience continued growth and remain the best performer globally, even if price growth is expected to slow by 10 per cent year-on-year in 2016.
“Australia’s economic slowdown, uncertainty surrounding the Australian leadership with a federal election looming, weaker share market performance in the past 12 months, and the new foreign investment fees explain the lower rate of growth likely in 2016,” said Knight Frank residential research director Michelle Ciesielski.
But these are also precisely the reasons why more and more upsizers are flocking to the luxury market. Michael Pallier, the principal of Sydney Sotheby’s International Realty, said, “Buying a bigger home is tax-effective as you don’t pay capital gains tax and, with lower interest rates locked in for long periods, it’s giving people confidence.”
With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now