2 Mar 2022
Australian Residential Property: Trophy Homes
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
This strategy is not new and we have employed it since starting the practice in 1991.
The primary residence is the centerpiece asset for the middle class in Australia.
The primary residence provides shelter without having to pay rent, access to capital by being able to borrow at the lowest interest rates in the market and tax free capital gains provided that prices increase.
The Ultra High Net Worth Individuals buy a trophy primary residence because it is the only asset on their balance sheet where they can invest tens of millions or hundreds of millions of dollars and not pay any tax on the capital gain.
It has been one of the most successful investment strategies for 30 consecutive years.
Will it continue?
More likely than not for Sydney and Melbourne because we have a housing shortfall given that migration level are set at 160,000 for 2021-22 according to Australian Goverment Depart of Home Affairs and likely to return back to 220,000 per annum.
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