WITH THE first one-day match between England and Australia in the NatWest Series taking place on Sunday, ahead of the Test series this summer, interest is sure to be rekindled in those who hanker after following the Ashes (spiritually, that is, as the mortal remains stay in the cricket museum at Lord’s) back to the southern hemisphere.

However those hoping to escape Britain’s less appealing charms (unpredictable weather, short pub opening hours, and Christmas Day indoors rather than on the beach) by buying a property Down Under will be disappointed to find that Britain and Australia have more in common than a passion for cricket. After three years of strong price rises in both countries, the Australian real estate market is following Britain’s example and suffering a bout of sluggishness. In the first three months of 2005 Australian property prices rose by just 0.2 per cent, and the latest figures from the Australian Bureau of Statistics show that annual house-price inflation in the first quarter of 2005 was 0.4 per cent — the lowest annual rise in nine years — while property prices in Sydney, Melbourne and Canberra have dropped in the past year.

Gary Ryan, of Knight Frank, says: “Sydney and Melbourne ran too far too quick. Sellers were pumping prices up and testing the market, and the market was buying.”

Echoing the UK’s experience, the Australian central bank raised interest rates several times in recent years, and as a result investor activity has been more subdued. After the latest rise of a quarter of a percentage point in March, the Royal Institution of Chartered Surveyors (RICS) expects the Australian market to experience a soft landing: it predicts that property prices there will fall by 1 per cent this year.

However, the outlook is not all doom and gloom: stories of a red-hot property market in Western Australia are making front-page news. Under the headline “Property runs wild in the West”, The Australian Financial Review recently reported the case of an estate agent selling 145 lots in just 6½ hours, and the Australian Bureau of Statistics reported annual house-price inflation in Perth of 9.9 per cent in the first quarter of 2005.

Gary Ryan says: “Demand from China for Western Australia’s resources (of energy and metals) has been unprecedented.” According to a report from Knight Frank’s Australian office, 2004 was “a year of records for the Western Australian economy — a record high economic growth rate; a record low unemployment rate.”

Greg Rossen, of the Real Estate Institute of Western Australia, says that this has given a push to the property market: “The real estate market in Perth and Western Australia is stronger than other states because our state economy and job market is attracting large numbers of interstate and international migrants. The new arrivals are boosting demand for housing in both the rental and home purchasing markets. We are also seeing a large share of the wealth created by the booming state economy finding its way into the investment sector of the property market.”

British investors are starting to take notice. “We have been blown away by the interest in Perth from British investors,” says Ryan, who has two-bed apartments for sale from £160,000 at Ellement996, a development in Perth. “The major unrestricted opportunity for non-residents is with new apartment developments. Apartments are probably the most appropriate form of investment for non-residents as they are not as management-intensive as a freestanding house and there is generally good rental demand for apartments in the right location; for an equipped and furnished serviced apartment a corporate rental would give yields (returns) of 5 to 7 per cent net. Non-residents can buy new houses which have not been previously occupied or they can buy a block of land, providing they commence development on the site within 12 months. Developers can get approval prior to commencement of development to sell 50 per cent of the apartments to non residents,” he says.

We Poms, then, should not lose heart — the odds may be stacked against victory for the England cricket team, but invest wisely and a win on the Australian property market could be yours for the taking.

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