The changing face of Australia’s property market is a subject of great interest for many, with foreign investment playing an increasingly pivotal role in shaping its contours. Among the most significant contributors to this trend are Indian investors, whose presence has made a profound impact on the Australian real estate landscape. To gain deeper insights into this phenomenon, we had a conversation with Hari Yellina, a renowned real estate investor and entrepreneur based in Melbourne.
According to the 2021 census, Australia is home to 783,958 individuals of Indian ancestry, a figure that accounts for 3.1% of the country’s population. A significant proportion of these individuals have chosen to invest in Australia’s property market. “Approximately a quarter, possibly even a third, of individuals with Indian ancestry invest in Australia,” says Yellina, highlighting the extensive reach of Indian investments in the country.
Yellina attributes this trend to a variety of factors, ranging from the high-quality education and employment opportunities offered by Australia to the cultural familiarity provided by its large Indian community. He notes that Indian investors are drawn to the long-term capital growth and low-risk nature of the Australian property market. “Australia is known for its stable political environment and well-regulated property market, making it a relatively low-risk option for international investors, including those from India,” he explains.
The types of properties Indian investors choose to buy are diverse, reflecting the variety of their needs and preferences. Yellina points out that commercial properties such as 7-Eleven stores and fuel stations are popular among Indian investors, as are large plots of land for subdivision and development. Residential properties, particularly single-dwelling homes, are also commonly chosen by Indian investors, especially by those who are starting families or are planning to do so.
The geographical distribution of these properties is heavily influenced by the distribution of the Indian population in Australia. Yellina observes that a significant number of Indian investors prefer to invest in Melbourne and Sydney, with Brisbane also growing in popularity. Once settled, many Indian investors gravitate towards well-established suburbs, with Parramatta and Harris Park in New South Wales and Tarneit and Truganina in Victoria being among the top choices.
Yellina shares that Indian investors typically spend around the 650,000 AUD mark, often leveraging the Australian banking system to finance their purchases. “The majority of Indians understand the concept of leverage in the property market and take advantage of the Australian banking system. They often opt for an 80% Loan-to-Value Ratio (LVR) and are diligent about repaying their loans on time,” he says.
“After purchasing a property, Indians in Australia often live in it for some time before upgrading to larger and more upscale houses. They typically retain their previous property for investment purposes”
— Hari Yellina
Despite recent increases in interest rates, Yellina remains confident in the resilience of Indian property buyers. “Indians live in the mortgage belt areas and they tend to have large mortgages. Although their interest rates have more than doubled recently, causing mortgage stress, they are in a relatively secure position due to a healthy job market. This allows them to better navigate the wave of high interest rates compared to other diaspora communities,” he explains.
Reflecting on the future, Yellina is optimistic about the continued growth of Indian investment in Australia’s property market. Given the rich historical legacy of economic growth and participation demonstrated by the Indian community, it appears that their success in Australia’s property market is a testament to their robust capacity for growth. As Yellina puts it, “The current success of the Indian diaspora in Australia is a testament to this legacy.”
This interview with Hari Yellina provides a glimpse into the evolving dynamics of Australia’s property market, highlighting the significant role played by Indian investors in shaping its future. As we move forward, it will be interesting to observe how these trends develop, and how they contribute to the transformation of the Australian property landscape.
When asked about their plans for the properties they purchase, Yellina highlights the pragmatic approach favoured by Indian investors. “After purchasing a property, Indians in Australia often live in it for some time before upgrading to larger and more upscale houses. They typically retain their previous property for investment purposes,” he explains. It seems that the Indian diaspora rarely sells acquired assets, with the exception of large acreage blocks.
In this respect, the majority of Indian buyers do indeed move into the homes they purchase, making them their primary residences. This preference underlines the personal as well as financial investment that many Indian buyers are making in their Australian properties.
There is also the issue of how rising interest rates in Australia might affect Indian property buyers. Yellina acknowledges the challenges of the current situation, in which interest rates have more than doubled, causing mortgage stress for many. However, he emphasises that the Indian community’s strong position in the job market and overall financial resilience mean they are well-equipped to handle these pressures. “They will ride this wave of high interest better than any other diaspora,” he asserts.
When asked whether there are more Indian buyers investing in Australia’s housing market than Chinese buyers, Yellina refrains from drawing direct comparisons. Instead, he emphasises the financial strength and resilience of the Indian community, which enables them to navigate the challenges of the property market effectively.
In conclusion, Yellina’s insights offer a fascinating glimpse into the rapidly evolving world of Australian real estate, highlighting the significant role of Indian investors in this landscape. The combination of cultural familiarity, excellent educational and employment opportunities, and a stable political and economic environment makes Australia an attractive destination for Indian investors. As the Australian property market continues to grow and diversify, it is clear that the influence of Indian investors will be a major factor in its future development.
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