Australia has led the worldwide real estate boom and enjoyed record price increases over the past three years, but as 2006 gets underway many fear that the recent success of the Australian real estate market is not sustainable.

While the Australian housing market may well face a short period of economic adjustment, there are still ways to profit from the real estate sector in Australia. Real estate investors examining the market just need to look a little further afield than Sydney!

Perth in Western Australia is one city where real estate prices remain affordable and where demand for quality accommodation to buy and rent is increasing which is creating an exciting micro property investment market opportunity ripe for exploration in 2006.

The reason for Perths sudden popularity from a real estate perspective springs from the fact that the city is enjoying a period of economic advancement led by a vast improvement in employment prospects. Local residents in Perth are benefiting from better paying employment and an abundance of opportunity, and the city is attracting a steady flow of inward migration as job seekers move to the city to take up offers of employment.

Historically Perths real estate prices have lagged well behind those of Sydney and Melbourne for example, and the average home finance sought to purchase in Perth is around 30,000 Australian dollars less than the average mortgage taken out elsewhere in Australia. The lower priced accommodation is attracting more interest from investors from across Australia as well who are all seeking a housing market with legs left to run. Furthermore the real estate sector in and around Perth is enjoying interest from international real estate investors who can see the long term prospects available.

As demand for accommodation in Perth increases as the city welcomes new residents, so the prices being charged for rental housing are on the up as well. Anyone who purchases real estate to let out in Perth right now can cash in on this boom in rental rate rises and retain their property while the predicted period of property price growth develops.

Across the rest of Australia many first time home buyers have been temporarily priced out of the housing market as property prices have exceeded affordable levels. While the market readjusts over the short term there are fears that a rental accommodation crisis is looming in some of Australias most popular cities such as Brisbane and Sydney. This concern is of course leading to sharp increases in rental rates being charged by landlords who are well aware of how valuable a commodity they own.

While this is an unfortunate situation for those caught in the rental trap it is a perfect situation for an investor seeking immediate returns on real estate investments in Australia. Anyone who makes a real estate investment purchase in Australia with the intention to let out that property will not only make a strong income currently but they will continue to enjoy property price growth over the longer term as the market readjusts and begins to grow again in Australia in the medium term.

And finally, if youre interested in the real estate market down under and are not an Australian citizen, overseas buyers are free to own real estate in Australia that has been granted permission for sale to foreign purchasers; and you can rest assured that the purchase process will be straightforward because it is so well regulated in Australia.