Invest
Why foreign property investment could be a ‘perilous exercise’
Half of Aussies would consider foreign property investment if it had an appealing price point, but this could be a bad idea, a property research house has warned.
Why foreign property investment could be a ‘perilous exercise’
Half of Aussies would consider foreign property investment if it had an appealing price point, but this could be a bad idea, a property research house has warned.
RiskWise Property Research chief executive Doron Peleg has told property investors to be aware of the significant hazards that accompany overseas property investment.
His warning coincides with research from money transfer group WorldFirst, finding half of Australians would consider investing in international property if it was cheaper than Australian property.
“While it may seem like a good idea at the time, investing overseas is quite a perilous exercise mainly because, unless you know the place or have family living in the country, you don’t know the local market, especially from a demand perspective,” Mr Peleg said.
“It’s only the local people who know if an area is really popular and has high demand or vice versa.”
Continuing, Mr Peleg said the Australian property market is generally highly regulated when it comes to valuations. These buyer protections may not exist in other countries and buyers’ understanding of fair market value is also compromised in international markets.
“Even here there are blacklisted areas where lenders require more deposit and they will also tell you if it is high risk,” he said.
“But overseas you won’t know any of this, not the supply and demand factors, not the demographics of the area and not whether good tenants are available.”
I still want to invest overseas, help me out?
Mr Peleg’s advice for those committed to foreign property investment is to become familiarised with the market, laws and regulations of the country and region in question.
Investors should also be aware of how they would recoup losses in the event of a tenant’s failure to pay rent.
Additionally, he noted that developers in some instances hold the property management company, and as such are not fully independent.
With this in mind, Mr Peleg said, “Often they offer a rental guarantee for a certain period, so you will be convinced the property generates good rental return and therefore its market value is higher. However, the person who pays for the rental guarantee is the investor.
“In addition, in Australia you know with an existing property the commission the agent receives is about 2 per cent and for off-the-plan maybe between 4-6 per cent.
“However, overseas in an unknown market you don’t know what the commission is and the person who ultimately pays is you and, in some cases, it could be 10 per cent or even more commission to the seller.”
He said the only exception is if an investor is purchasing with good advice from close friends or family who live in the area.
However, even this safety net may not be good enough, he added.
“RiskWise’s advice to investors is if they must purchase overseas, to at least try to stick with existing properties as opposed to off-the-plan, which carry a lot higher risk especially if there is a danger of oversupply in the area,” Mr Peleg said.
RELATED ARTICLES
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
Property
Home guarantee scheme shake-up challenges Australia’s housing market players
From 1 October 2025, the expanded Home Guarantee Scheme (HGS) materially widens what first-home buyers can purchase and where. By sharply lifting price caps and relaxing eligibility settings, the ...Read more
Property
GSB’s first‑home buyer play: turning policy tailwinds into market share
Great Southern Bank’s latest results show that nearly one in three of its new mortgages now go to first‑home buyers—evidence of a fast‑moving market reshaped by government guarantees, easing rates and ...Read more
Property
Why investors are fleeing and renters are scrambling in Australia's housing maze
Australia’s rental market is tightening even as individual landlords sell down. New data points to a multi‑year investor retreat tied to higher holding costs and regulatory uncertainty, while prices ...Read more
Property
Australia's 5% deposit guarantee: Unlocking gains while balancing risks in the market share race
Can a bigger government guarantee fix housing access without fuelling prices? Australia is about to find out. The Albanese government’s expanded 5% deposit pathway aims to help 70,000 buyers, remove ...Read more
Property
Australia's bold move the 5% deposit scheme shaking up the housing market
Can a government guarantee replace lenders mortgage insurance without inflating prices or risk? Canberra’s accelerated 5% deposit scheme is a bold demand-side nudge in a supply‑constrained marketRead more
Property
When rates drop but stress sticks: exploring Australia's mortgage arrears dilemma
Headline numbers suggest arrears ease as rates come down. The reality in Australia is messier: broad measures dipped into mid‑2025, yet severe delinquencies and non‑bank portfolios remain under ...Read more
Property
Property advice goes rogue as risks and opportunities knock on every door
A warning from the Property Investors Council of Australia has put a spotlight on the surge of unlicensed financial advice around property strategies. This is no niche compliance issue—it’s a ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
Property
Home guarantee scheme shake-up challenges Australia’s housing market players
From 1 October 2025, the expanded Home Guarantee Scheme (HGS) materially widens what first-home buyers can purchase and where. By sharply lifting price caps and relaxing eligibility settings, the ...Read more
Property
GSB’s first‑home buyer play: turning policy tailwinds into market share
Great Southern Bank’s latest results show that nearly one in three of its new mortgages now go to first‑home buyers—evidence of a fast‑moving market reshaped by government guarantees, easing rates and ...Read more
Property
Why investors are fleeing and renters are scrambling in Australia's housing maze
Australia’s rental market is tightening even as individual landlords sell down. New data points to a multi‑year investor retreat tied to higher holding costs and regulatory uncertainty, while prices ...Read more
Property
Australia's 5% deposit guarantee: Unlocking gains while balancing risks in the market share race
Can a bigger government guarantee fix housing access without fuelling prices? Australia is about to find out. The Albanese government’s expanded 5% deposit pathway aims to help 70,000 buyers, remove ...Read more
Property
Australia's bold move the 5% deposit scheme shaking up the housing market
Can a government guarantee replace lenders mortgage insurance without inflating prices or risk? Canberra’s accelerated 5% deposit scheme is a bold demand-side nudge in a supply‑constrained marketRead more
Property
When rates drop but stress sticks: exploring Australia's mortgage arrears dilemma
Headline numbers suggest arrears ease as rates come down. The reality in Australia is messier: broad measures dipped into mid‑2025, yet severe delinquencies and non‑bank portfolios remain under ...Read more
Property
Property advice goes rogue as risks and opportunities knock on every door
A warning from the Property Investors Council of Australia has put a spotlight on the surge of unlicensed financial advice around property strategies. This is no niche compliance issue—it’s a ...Read more
