Australia's Millionaires Invest In Real Estate

Date: 12/10/2010

Australia's millionaires are putting their money into real estate, according to new research.

A survey by Merrill Lynch and CapGemini revealed that the nation's wealthiest people have chosen to invest in property, which makes up 40% of their portfolios- higher than any other country in the Asia Pacific region.

Property trumped equities, which made of 25% of total portfolios, and cash, which came in at 19%.

Peter Opie, senior vice president of investments at Merrill Lynch, indicated that the allure of property transcends wealth classes.

According to Opie, property investment picked up speed in 2009.

"Australian high-net-worth individuals turned the risk switch off in 2009, with investors perceiving real estate to be less volatile than many other forms of investment," said Merrill Lynch Wealth Management's senior vice-president of investments, Peter Opie. "This is a trend that has continued through 2010."

In the next six to 12 months, Opie predicts the level of investment in equities will rise in Australia and around the world.

The second half of 2010 has seen mortgage lending ratios increase from the standard 80% to above 90% and even 105%. This opens up opportunities for a greater number of people to leverage off the equity in their current mortgage to purchase an investment property, following in the footsteps of Australia's millionaires.