Hello peeps, anyone here looking to buy oversea property? Or anyone buying 1 in Melbourne? I am looking to get one apartment and im looking at Melbourne as it is more of a safe haven to invest in IMO. The price is pretty steep, capital growth is not that fantastic but in long term holding, I think it should be an uptrend.
Anyone has any advice of getting one in Docklands area? Is it overpriced? This one looks like it is just beside CBD wor. Any expert here with advice?
https://investoprop....ments-for-sale/ This is one is the one in Docklands.
https://investoprop....urne-southbank/ And this one in Southbank.
I studied in Melbourne for 3 years and am currently working for a Singapore developer that is developing apartments in Melbourne. Will try to help as much as I can but I could be incorrect in some areas (disclaimer first)
House and Land vs Apartments
Locals still prefer house and land. But the quantum is high (in millions) even for suburbs close to the CBD. The cheaper option is Werribee (maybe $700k?) but you are targeting quite a niche market. The government is trying to create a town there by investing in a job precinct and the outdoor zoo. However popular house and lands are usually snatched by the locals and when you have an opportunity to buy a house and land it could mean that the demand is not up there
Apartments are still dominated by investors and immigrants. You should consider 2 bed 1 bath/2 bath as their yield is generally better. Locals are starting to shift into apartment but they are looking for 3 bed with luxury finishes. The buyer profile are doctors, accounts etc. and they have the money to buy thus they wont be renting from you
You can consider townhouses. Getting popular and there is strong demand from the locals
You will have to pay 5.5% stamp duty (for completed projects, and almost 0% for off the plan projects) and 7% foreign stamp duty.
Income from rental - you can hire a tax advisor who will file the depreciating taxes and you may not have to pay for it
IIRC there is a new tax for people who rent out their apartment. I need to check for you later tonight
You cannot sell your unit to a foreigner. Only locals can buy 2nd hand. Thus quick liquidity of your asset is an issue.
Area to Consider
CBD - best bet for rental. Projects like Avant (almost fully sold) has a rental company within called Avani which will rent out your apartment like a hotel. They are doing very well. You can also consider Aurora which is currently going staged Settlement (TOP) and there are owners who are trying to sell at cheap
Southbank - locals prefer this area as they want to be separated from their work place in the CBD. However there is an over supply in this area, with many old and upcoming new projects like Prima Pearl or Australia 108. The latter is gonna be the tallest residential building and you will have great views. Interestingly i use to stay in Southbank before I moved to the suburbs.
Docklands - not recommended. Only known for the new offices and the famous Asian club Alumbra.
- Current government is not approving new developments + many off the shelf projects have not launch due to weak market sentiments
- Fragrance sold one of their projects to another Australia developer to be converted to office tower = one less residential building
- Construction cost and land cost in Melbourne is only going to go up. Fragrance sold their land at twice the price for holding it for a few years
- Government is still welcoming skilled immigrants which will slowly drive demand
- Valuation is currently poor, usually short by 10 to 20% off contract price. this will affect loan
- Weak demand due to tight/zero lending by local banks. However how long can this last? If developers are not building = no jobs for the locals. We are expecting the banks to soften their stance sooner or later
- Weak demand due to China tightening and preventing their people from transferring money out. We got many China buyers. Most of them by cash but they are having difficulty settling their apartment.
- Many developers are offering 5% to 10% rebate to absorb the stamp duty. However not many are lowering their price any further as their land and construction cost are high
We expect demand to be weak and prices to be stagnant. Supply is high but good thing is there will not be that many new developments. But should you buy when demand is high and price is increasing? Or should you buy when the market is weak?