With rising property prices in major Australian cities, many expatriates face a strategic choice: invest locally in Australia or build wealth through French real estate and SCPI.

Real estate strategy

Investing in Australia or France?

Rentvesting, leverage, taxation, SCPI and long-term wealth building.

Objective: compare two major investment strategies used by French expatriates to build long-term wealth and prepare for retirement.

📌 TL;DR

  • High Australian property prices push many buyers toward rentvesting.
  • Australia offers leverage, tax tools, and demographic growth.
  • France (via SCPI) offers diversification, fixed-rate debt, and long-term tax efficiency.
  • Both strategies can coexist and reinforce each other.

Increasingly, people choose to buy an investment property while renting their primary residence in a location that better suits their lifestyle. This strategy is known as rentvesting.

In Australia, extremely high property prices in major cities and bank requirements for deposits (typically 20% to avoid Lenders Mortgage Insurance – LMI) make owner-occupation challenging for many households.

As a result, French expatriates in Australia generally face two strategic options:

  1. Invest in Australia
  2. Invest in France

1) Investing in Australia

Real estate investment in Australia offers several structural advantages:

  • Location-driven growth (capital growth highly dependent on suburb selection).
  • High leverage – up to 90% LVR with Australian lenders.
  • Negative gearing via depreciation mechanisms.
  • Family Trust structures to distribute income to lower tax brackets.
  • SMSF strategies using concessional/non-concessional contributions and LRBA.
  • Strong population growth (ABS: +239,600 net migrants in 2019).

However, investors must also manage significant constraints:

Constraint Impact
High property prices Sydney ~$875k, Melbourne ~$683k (CoreLogic)
Deposit requirements 10–15% minimum + LMI under 20%
Higher interest rates ~2.5%+ vs lower fixed rates in France
Stamp duty State-dependent transaction tax

2) Investing in France via SCPI

Many French expatriates plan to return to France after 10–15 years abroad. As a result, they often build wealth through French real estate, increasingly via SCPI (Sociétés Civiles de Placement Immobilier).

Rather than managing physical property remotely, this analysis focuses on SCPI investment.

✅ Key advantages of SCPI

  • Professional asset management.
  • No administrative burden.
  • Average yield ~4.4% + price growth ~1.2% (2019).
  • Fixed-rate loans over 15 years (~1.95%).
  • No deposit required, entry below €100k.
  • Immediate diversification.
  • Favourable taxation for European-source income.
  • No income tax or social charges after 30 years holding.
  • Estate planning options (bare ownership, donation strategies).

As with any real estate investment, SCPI also presents drawbacks:

  • Management fees (7.5%–12%).
  • Subscription fees (8%–12%).
  • Entry delay (4–6 months).
  • Exposure to property and economic cycles.

📊 SCPI Investment Example

  • Investment: €200,000 across two European SCPI.
  • Financing: Two 15-year loans at 1.95% fixed.
  • Deposit: €0.
  • Monthly effort: ~€538.
  • After 15 years: €9,550 annual income.
  • Estimated value: €233,355 (1% annual revaluation).
  • IRR: ~9.93% over 15 years.

Just like Australian property, SCPI investment is a long-term strategy (8+ years). When combined, both approaches can create a diversified and resilient wealth-building strategy.