While Australia’s house prices continue to rise, Ray White Chief Economist Nerida Conisbee has considered whether you could find better value in one of your favourite holiday destinations at a $1 million price point.
She said while Australians are property obsessed and love to invest, we tend to stick pretty close to home when it comes to building a property portfolio.
The places we invest in are overwhelmingly in Australia and, as well as being nervous about overseas buying, we are also restricted from purchasing in many countries.
For example, in Thailand, foreigners can own an apartment but are forbidden from owning freehold land.
New Zealand has completely banned overseas buyers.
Elsewhere, there are far fewer restrictions.
In the United Kingdom, anyone can buy, even if you don’t live there. It’s a similar situation in the United States.
In Cyprus, they will even throw in a passport, although you do need to spend at least €300,000 in a government approved new development.
The final challenge is getting finance.
“Australian banks are not keen on providing finance to offshore purchases of residential property,” Ms Conisbee said.
“And it’s difficult to get finance from foreign banks. If you want that Parisian apartment, it might be best if you have the cash available.”
Ms Conisbee said if buyers had the finances and weren’t apprehensive about buying overseas, a $1 million budget could get some attractive properties.
She said it was difficult to compare pricing on a global level, but on a square metre basis, Turkey is the cheapest country to buy in, while Switzerland and Luxembourg are the most expensive.
“But in the United Kingdom, cities like London would have precincts that are potentially far more expensive than Switzerland,” she said.
“Given the challenges with comparing prices, I have instead opted to take a look at some well-known areas to see what is available for around $1 million, and compare what you would get in Australia.
“This will allow you to see exactly what you get for your money.”
One bedroom in a global city
Ms Conisbee said the Australian dollar was pretty weak at the moment, and AUD$1 million would only get you around USD$715,000, £525,000 or €610,000.
If you’re dreaming of New York, London or Paris, this is enough to buy you a one-bedroom, one-bathroom apartment close to Central Park, close to the City of London or near the River Seine.
Ms Conisbee said this is roughly similar to the median for our most global city, Sydney, where the median for an apartment is $960,000 and could get you a unit on the outskirts of the Sydney CBD, such as a one-bedroom Rosebery unit.
If you want a comparatively cheaper option, you could look at Melbourne’s CBD where the median for an apartment is $460,000.
Family home in the ‘most liveable city’
If a one-bedroom apartment doesn’t appeal, then living in the most liveable city in the United States may do so.
Ms Conisbee said Austin, Texas, is ranked as one of the best places to live and the neighbourhood of Highland is one of its best suburbs.
“For AUD$1 million, you are looking at a pretty nice house on a big block, like this one on Northcrest Boulevard,” she said.
“In the United Kingdom, in one of Edinburgh’s best suburbs, West End, you can also buy a three-bedroom house.”
Ms Conisbee said in Australia, you would be unlikely to get into many of our most expensive suburbs which currently sit at about AUD$3 million, but you could buy in a nice city in Adelaide, where Henley Beach has just hit the $1 million median.
“In Melbourne, the up and coming inner west could also appeal with Footscray hitting that price point now,” she said.
A beachside getaway
If you want to buy in Asia, Ms Conisbee said a beachside holiday home would be good value, but buyers would need to assess what they were allowed to purchase in each country.
“One million Australian dollars is approximately 24 million Thai baht. In Phuket, you can get a luxury hillside villa for this price,” she said.
“In Indonesia, that same million will get 10,405 million rupiah which would get you a similarly beautiful villa close to the beach in Canggu.
“In Australia, you can definitely buy into a beachside suburb but you are unlikely to get a new luxury villa for the price.
“Pelican Waters on the Sunshine Coast recently hit that price point and the weather is likely to be just as nice.”
A country mansion
Ms Conisbee said there were nice properties in rural areas in Europe and Australia, with the main difference being that in Europe you can afford a medieval tower.
“In Australia, you would get something potentially as large but certainly not as historical,” she said.
“I doesn’t know much about the predominantly rural Auvergne region of France but for AUD$1 million, you can get something quite different like this historic stone manor with its own tower.
“For $1 million in Australia, you could get into inland parts of northern New South Wales. Mullumbimby currently has a median of $988,000.”
Close to Melbourne, Ms Conisbee said Macedon had recently clicked over to the $1 million median mark.