How to master borderless investing

Investing interstate in Australia

As reported by the 2023 PIPA Annual Property Investor Sentiment Survey, NSW remains in the top 3 investment locations for investors.

However, focusing solely on NSW means you might miss out on lucrative Brisbane, Perth, and Melbourne, offering promising returns and potential for growth. Borderless investing allows you to expand your investment horizons and capitalise on the different market trends and opportunities around Australia.

Why become an interstate investor?

It is problematic to think of the whole of Australia as comprising one, single housing market. On the contrary, each state and territory has different real estate markets with unique economic drivers, nuances and different cycles that impact real estate prices. By investing in interstate property markets with strong growth potential or healthy rental returns, you can leverage market cycles and spread your risk across multiple locations.

By comparing rental yields across the various capital cities, you can identify potential investment opportunities that are missed by investors who only focus on their home market. For instance, Perth’s 5% rental yield in Q1 2024 is substantially higher than Sydney’s 2.8% or Melbourne’s 3.1%.

If you don’t want to limit your portfolio’s potential, going beyond your home market is a sound investment strategy.

Buying your first interstate property

Buying your first interstate property can be a game-changer. It’s not just about diversification; it’s about tapping into markets with higher potential returns.

The higher costs in Sydney often make investment unaffordable, whereas Perth offers some of the most accessible entry points with low vacancy rates and high rental yields. Melbourne, consistently ranked among the best places to live, is rebounding with affordable inner-city properties With a 21% price growth forecast over the next three years, Melbourne is definitely one to watch. Brisbane remains one of Australia’s strongest capital city markets, boasting an extraordinary 61.5% price growth since COVID. Imagine if you had bought in 2019, by 2025 you could have doubled your investment.

Think about it – by investing in different states, you’re not just hedging your bets; you’re setting yourself up to benefit from the unique growth patterns of each market. This strategy can provide a more consistent and robust return on investment, shielding you from localised downturns and allowing you to ride the wave of growth wherever it may occur. To find out where the hottest markets are right now, download our hottest market e’book

Benefits of interstate investment in Australia

Stamp duty considerations

Stamp duty rates vary across Australia. From 4.5% in Tasmania to 6.5% in Victoria, buying property interstate can expose you to significant cost savings. By researching and comparing stamp duty rates in different states, you may find opportunities to minimise your upfront costs and maximise your potential returns.

Greater potential for capital growth

With Australia’s diverse economy, different states experience varying levels of growth at any given time. As a result, investing in different markets provides access to a range of economic conditions that drive capital growth. For example, investing in Brisbane during a housing boom may lead to higher returns compared to Sydney or Melbourne during a downturn.

Different cycles of property markets

While local markets may experience downturns, other states might be enjoying growth, allowing investors to tap into multiple opportunities at once. By keeping an eye on various markets, investors can adjust their portfolios accordingly, capitalising on times when other housing markets are thriving, thus reducing their exposure to any single market’s economic fluctuations.

What should you know before making interstate investments?

When planning your property investments, it’s essential to look out for key signs of population growth, increasing job opportunities and infrastructure development. These are good indicators of future property price growth.

Before making any interstate investments in Australia, it is important to also understand the different economic indicators, demographics, and property trends in different states.

Our MyCity Guides provide useful insights into each state’s property market, including population growth rates, infrastructure development plans, and median house prices. Armed with these insights, investors can make informed decisions. And with the support of their Ironfish Property Investment strategist, they can choose the right market to invest in at the right time.

The key to choosing the right markets to invest in lies in thorough research and due diligence. Investors should not solely rely on past performance or general market trends – they need to consider the potential of a certain location for long-term growth. This is where partnering with a long-standing, reputable property investment company can help. At Ironfish, we have the insights, expertise and resources to identify suitable opportunities in different markets.

Final Thoughts

Don’t be bounded by your local property market when it comes to investing in real estate. Look beyond your state or city and open up new opportunities for growth and diversification.

Interstate investment, with the guidance of experts like Ironfish, can significantly enhance your property portfolio’s performance. By leveraging Ironfish’s expertise, you can navigate diverse markets, spread risk, and capitalise on lucrative opportunities across Australia. Our portfolio approach helps property investors build a robust and diverse investment portfolio that stands the test of time.