Australia's ease of doing business makes investment attractive

The ease of doing business could be a big factor in foreign investment in Australia. The World Bank Group has released its rankings for ease of doing business for 2014, in which Australia ranked tenth out of 189 measured economies.

Australia in top ten

While the index measures business conditions for domestic ventures, it is important to remember that many overseas investors buy into local enterprises, or form local entities through which to trade. The environment in which these businesses operate, in terms of compliance and infrastructure, can make a huge difference to the willingness of overseas benefactors to engage in business in our economy.

Small countries with very accommodative business and financial policies to assist growth topped the list, with Singapore, New Zealand and Hong Kong taking out the top three places. Australia was immediately ahead of Sweden, Iceland, Ireland, Germany, Georgia and Canada, whilst China's quickly developing economy only came in at number 90. The very bottom of the list was predictably dominated by authoritarian and embattled African countries.

Australia did especially well in the rankings for starting a business, with a global ranking of seven, and in the availability of finance, for which the country ranked fourth in the world.

While dealing with construction permits was not one of Australia's hottest features, all of the aspects measured were better than the OECD average, with fewer procedures to go through, less time to complete and a lower cost involved.

The business environment

With inflation well within the Reserve Bank of Australia's (RBA) limits, and interest rates looking to stay at their all-time low, Australia continues to be a very attractive investment option for overseas speculators.

President of the Real Estate Institute of Australia, Peter Bushby, stated that he expected the RBA to maintain its accommodative stance on interest rates, as inflation figures were well within their bounds.

"With inflation under control combined with indications in some markets that housing is tempering, it's appropriate that the RBA Board maintains interest rates at their present level," Mr Bushby said.

Economic growth of 3.1 per cent, according to the RBA, is a positive influence, as is the falling Aussie dollar. This makes it increasingly cheaper for those in North America and Asia to invest in Australian residential and commercial real estate.

According to the NAB Residential Property Survey: Q3 2014, there are has been an increase in overseas investor activity in the Australian property market, especially in the demand for new developments.