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KUALA LUMPUR: With an estimated population growth of 2.1% per year and low housing completion, the Australian residential property market is poised to offer investors stable and reliable returns in the coming years.
“Australia currently has a rental vacancy rate of less than 2%. The market is compounded by robust future demand with a projected accommodation demand of an additional 620,000 households before 2030, which will drive property prices up,” said Ian Chen, CEO of Jalin Realty International Pte Ltd.
Chen acknowledged that most investors would opt to leverage property investment to create higher rates of return in a faster time frame. However, Australia’s diverse range of properties can offer a low risk investment environment with promising capital growth.
“Investors can expect capital returns of about 10% per year and rental yields of about 4% to 5%. And the value of properties is expected to double every seven to 10 years,” said Chen. Jalin Realty is the exclusive marketing agent in Malaysia and Singapore for Lend Lease’s Exo Apartments in Melbourne.
Exo Apartments, located at Victoria Harbour in Melbourne, is a mixed development comprising 96 units of 1- to 2-bedroom apartments with sizes starting from 678 sq ft. The building also serves as a commercial car park with 642 bays, and has over 12,916 sq ft of retail space on the ground floor. The apartments are expected to be completed in June 2013.
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| Chen (left) and Christie at the launch of Exo Apartments. |
According to Lend Lease general manager of National Sales (Apartments) Ben Christie, the apartments are targeted at investors and first-time buyers with a price tag of A$405,000 (RM1.3 million) onwards.
“Buyers need only pay the 10% downpayment upon execution of the contract of sale and nothing more until the completion of the apartments,” said Christie, adding that the current interest rate in Australia is 7%.
Chen believes the stable political environment, consistent domestic economics, robust domestic and capital growth are the main attractions for property investors in Australia.
“The country has a low unemployment rate of 4.9%, widening trade surplus, low inflation and a diverse economy. Its gross domestic product is expected to continue growing at 2.5% to 3% in the coming decades,” said Chen.
The Australian government has also put in place regulations to curb debt and protect investors. Developers are required to place the 10% downpayment in an untouchable trust for safekeeping and developments are only permitted to be constructed once the developer reaches pre-sales of 80%.
“Should a developer not reach quota of 80% pre-sales, the downpayment will be returned to the customers,” said Chen.
Understanding that the process of acquiring a property in a foreign land can be daunting to some, Jalin Realty guides buyers through the entire process from booking till property completion. Recommendations and advice on property management, taxation, insurance and migration to Australia are also be given to buyers.
“We foresee our partnership with Land Lease will be mutually rewarding judging from the response to the road shows held in Kuala Lumpur and Singapore last week,” said Chen.
Lend Lease has over 5,000 completed projects under its belt and a market capitalisation of A$5 billion. In Victoria Harbour alone, it has about A$1.8 billion worth of developments, comprising a mix of retail, residential and commercial projects.
This article appeared on the Property page, The Edge Financial Daily, August 5, 2011.
