The report, compiled by Colliers International, shows that Russian purchasers accounted for a significant 35.2 million Australian dollars ($30.7 million, at the time of writing) of the 269.2 million Australian dollars ($235 million) invested by internationals in the city in the last financial year.
It also found that the Gold Coast, situated on Australia's eastern seaboard, had become one of the country's key foreign investment hot spots, accounting for almost half of the 547.7 million Australian dollars ($478.1 million) spent by internationals in the state of Queensland, dubbed the 'Sunshine State'.
Russian buyers had been involved in 64 of the 595 property transactions made to international purchasers on the Gold Coast in the last financial year, and the number was expected to rise.
This is the highest level of spending by the Russian Federation on the Gold Coast to date and is a significant increase on what we have recorded in previous studies.
Over the past two years, Russian buyers spent about 12.7 million Australian dollars ($11.1 million) each year and before that, it was less than 3 million Australian dollars ($2.6 million) a year.
Russians are looking to invest some of their wealth off-shore to places such as the Gold Coast, where property has the potential for strong capital growth.
The city also has the added benefit of year-round sunshine, attractive lifestyle opportunities and, due to its location less than an hour's drive from the state's capital of Brisbane, is easily accessible domestically and internationally.
Many Russian investors are looking to purchase properties that maximize some of these attributes and prestigious waterfront addresses in particular are gaining their interest.
Homes in elite estates such as The Sovereign Islands and luxury apartments in high quality developments such as Hilton Surfers Paradise Hotel and Residences are just some of the properties attracting interest from Russian purchasers.
They are also two of the major projects underway on the Gold Coast, which is riding a massive 66 billion Australian dollar wave of development, solidifying its position as one of the fastest growing cities in Australia.
Recent research found the level of development activity underway on the Gold Coast has increased by a staggering 381 percent since 2001, when just 13.7 billion Australian dollars ($12 billion) worth of projects were underway or in the planning stages.
The figures include major residential and commercial development, and infrastructure improvements, valued at more than 10 million Australian dollars ($8.7 million).
The Gold Coast was moving into a new era. Major developments are underway in every sector of the market which, on completion, will see the Gold Coast become one of Australia's most sophisticated cities.
The region's population growth of 3.4 percent per annum is largely due to those migrating from Australia's southern states.
The city is thriving with a healthy local economy and is geared up for a prosperous future, which is reflected in the rate of development planned and underway.
The State Government has recognized the need for vital new services in the region, major national and international developers are actively banking land and construction groups are making their presence felt by taking on some of our largest developments.
Although the Gold Coast has experienced 30 years of sustained growth, this development wave signals a new era _ one which will secure the city's position globally as not just a tourist destination but a thriving, progressive city in its own right.
At the heart of the Gold Coast is Surfers Paradise, a big name in the tourism industry which is recognizable worldwide.
The region is competing on a world stage and with all it has to offer for investors, it's easy to see why foreign investors are coming to the Gold Coast.
The several points foreign investors needed to consider. One of the first steps is securing approval from the Australian Government's Foreign Investment Review Board.
This is a requirement for a wide range of property purchases, including residential real estate, vacant land, developed commercial property valued at 50 million Australian dollars ($43.6 million) or more, accommodation facilities, residential and commercial leases greater than five years, and profit sharing arrangements over urban land.
It is important to note that, except in limited circumstances, approval is rarely granted to a foreign person seeking to acquire residential real estate that has previously been owned or occupied, and therefore internationals often purchase off- plan or units in newly completed developments.
Foreign investors should be aware of a range of taxes and charges, including stamp duty, registration costs, land tax and capital gains tax.
The rate of stamp duty in Queensland is lower than most places in Australia and is determined using a sliding scale.
Stamp duty adds to the cost of purchasing property _ for example, for an investment property purchased for 1 million Australian dollars, the current rate of stamp duty would be approximately 38,000 Australian dollars.
The cost to register a transfer of land from the seller to the buyer for a 1 million Australian dollar ($872,900) property is currently about 2,200 Australian dollars ($1,920).
Land tax, which is payable for a property not used as a principle place of residence is assessed on the unimproved land value (ULV), which for a property with an ULV of 500,000 Australian dollars ($436,450) would currently be about 4,000 Australian dollars ($3,492) per annum.
There may also be capital gains tax and other tax implications based on a buyers specific situation.
All purchases of property in Australia need to be made in Australian currency, so foreign investors should be aware of fluctuations in the exchange rate.
Other issues that needed to be considered included:
- ownership structures: implementing the correct structure can save considerable money over the life of the investment.
- contractual issues: generally the risk of a property passes to a purchaser after a contract is entered into so insurance should be taken out immediately; a cooling off period generally applies to residential property but not commercial property.
- obtaining a loan: Australian lenders apply a loan to value ratio when lending money to buyers to purchase property. Lenders will generally lend between 60 percent and 80 percent of the value of the property being purchased by a foreign buyer. The foreign buyer will therefore need to come up with the remaining balance.
- legal advice: investors should consult an experienced property lawyer before entering into a contract to purchase property on the Gold Coast as numerous issues need to be considered including contractual issues, government approval, an appropriate structure, tax and financial issues.
