Many Australians are jealous that asians are doing better than them elsewhere n in their own country. This has been the case for decades, a mindset hard for them to change. I think Asians should one day just ignore them n let them support their own economy. I m beginning to suspect the most livable city status is simply a come invest in our country campaign to boost their economy. How can Australia be the most livable place with ppl thinking Asians living in the cbd is bad demography for investing a cbd pty?
Studio investment at upper west side in melbourne
- Thread starter kandinsky
- Start date
I was being sarcastic mate
Aaron and Deltaberry are both Chinese. I was born in Singapore and certainly consider myself to be both Aussie and Asian.
Vaughan did not say that Aussies dont want to live in studios because it is full of Asians, he said because Aussies dont like living there it ends up being full of Asians who are generally more used to living in such small places.
You are being a bit of a drama queen here, nothing untoward was said whatsoever.
Ultimately though you seem intent on buying this place despite there being repeated detailed posts about why you shouldnt. GOod luck with your purchase
@sanj - So people from Asia are not the sort that will pay a lot of rent or want to purchase a property for a premium price??? To add, that "is a bad market demographic"??? What about the large majority of aussie renters and expats from western countries who rent in the cbd because they work there?? What gives this joker the impression that Asians won't pay premium for a property when we have been doing that all along from Beijing to hong kong to shanghai to singapore???
btw being an aussie chinese doesnt mean one can't be racist against asians from outside australia.
btw as of now, i have not bought anything in australia yet. not looking for certainty or proof, just looking to have a friendly discussion on the pros and cons and not having people like delta equating such investments as eating poop n vaughan commenting about asians being blar blar blar. If delta is indeed chinese, then I am quite embarrassed.
You did mention earlier that you wanted information to prove beyond a reasonable doubt to either proceed or not with signing the contract.
As you seem to be comfortable with the idea of a UWS studio apartment renting out easily to either professionals or students within the Melbourne CBD, what other 'certainty' or 'proof' were you looking for?
As you seem to be comfortable with the idea of a UWS studio apartment renting out easily to either professionals or students within the Melbourne CBD, what other 'certainty' or 'proof' were you looking for?
think someone mentioned studios falling in price but what i still do not understand is if there are renters willing to pay good rental on a studio which seems to be on the increase, why would there be people selling at a loss under normal circumstances (not referring to those with financial difficulties)? Selling at a loss to a buyer would mean increasing the rental yield of the next buyer and this makes little sense from an investment point of view.
They sell at a loss because they overpaid for it in the first place (OTP + rental guarantee + furniture package). When the $300pw rental guarantee period expires and you re-let it at market value you'll find its worth $240pw. Therefore the yield has decreased which reduces its value as an investment so the new buyer will pay less. The body corporate fees of $5,000pa also further reduce net yield.
So if rental yield falls for studios , rental yield would fall even lower for one, two n 3 bedders , wouldnt it, coz studios typically have the highest rental yield. So does it mean those who own bigger units in the cbd would be forced to sell low as well? Where is the logic? If you are saying owners of bigger units are better able to weather out low rental yield due to strong finances,, that doesnt add up as well coz buyers of studios are generally cash rich since they have to fork out 40% cash instead of the normal 20% n have a smaller loan quantum to finance. Sorry, I still don't see the logic in what thou have written.
@Tingtong - if what you say is true, then suburbs with much poorer rental than cbd would also be forced to sell because of poor rental yield n u r indirectly saying almost everyone would be forced to sell. If your theory of rental determining pty value is always the case , then suburban homes should fair the worst especially landed which yield the least.
Looking at your post times, I'm wondering if you sleep.
Perhaps rage has kept you up all night. It's ok, relax. Get some sleep.
Perhaps rage has kept you up all night. It's ok, relax. Get some sleep.
Suburban homes aren't studios bought OTP in complexes with hundreds of identical ones.
i would buy neither - better to have something larger than not at all.
i think you have to a step back that maybe even asians think that way?
i think it used to be most livable city... nowadays traffic crawls are similar to jakarta, kuala lumpur during certain times in the day.
Most asians (whether chinese or non-chinese) invest in australia as it is the closest western country to asia compared to US or UK. Secondly, it is a place where asians tend to park money. majority of these asians do not like 35sqm places as they have these back home. Majority want what they can't have larger spaces, parks, victorian or edwardian terraces etc etc. Most ppl in china, hk lives in apartments and majority in singapore too - so why would anyone want to live in pigeon hole? working professionals over time would not want this and so you only targeting the student market (which is really limited atm)
Depends - wealthy asians from china pay premium all the time. Seen it so many times, they flaunt wealth and buy in 150 clarendon, eureka, freshwater place as it is associated with so called wealth or prestige
they are other Asians who are worth x amount of mil etc who would rather eat bread and curry at home 4-5 times a week, travel air asia to Australia all the time even though differences btw full fledged airlines are maybe AUD80-100 and not switch on the heater at home to save electricity.
I'll ignore all the blah blah and say something useful 
Kadinsky the reason why people tend to say these are higher risk is:
1. VERY high strata costs. Often with OTP they start high and move HIGHER
2. Limited ability to resell - yes the market for people willing to live in studio is growing but the bank policies aren't so the market for people to buy is smaller. This will also limit it's capital growth prospects
3. Limited market for renters - whilst small living is becoming more popular it still isn't that popular
4. Rental guarantee for one year at 6.5%. What is the market rent for the unit currently without the guarantee
5. Melbourne CBD is about to become awash with many apartments coming on - this high availability will affect rental prices and sales values.
In my opinion I would spend the $300k on an apartment one suburb out of the city which will have better capital growth prospects. Buy a small one bedroom apartment in a blue chip suburb - if you use the services of a Buyers Agent that could find a good prospect for you - it might not have 6.5% return straight away but it is more likely to grow there
I don't know the area too well but I would go for something like this would could have value added with a small renovation and increase the yield that way
http://www.realestate.com.au/property-apartment-vic-richmond-114132079
Kadinsky the reason why people tend to say these are higher risk is:
1. VERY high strata costs. Often with OTP they start high and move HIGHER
2. Limited ability to resell - yes the market for people willing to live in studio is growing but the bank policies aren't so the market for people to buy is smaller. This will also limit it's capital growth prospects
3. Limited market for renters - whilst small living is becoming more popular it still isn't that popular
4. Rental guarantee for one year at 6.5%. What is the market rent for the unit currently without the guarantee
5. Melbourne CBD is about to become awash with many apartments coming on - this high availability will affect rental prices and sales values.
In my opinion I would spend the $300k on an apartment one suburb out of the city which will have better capital growth prospects. Buy a small one bedroom apartment in a blue chip suburb - if you use the services of a Buyers Agent that could find a good prospect for you - it might not have 6.5% return straight away but it is more likely to grow there
I don't know the area too well but I would go for something like this would could have value added with a small renovation and increase the yield that way
http://www.realestate.com.au/property-apartment-vic-richmond-114132079
Here is my take on the situation:
1) In general, Aussies are not interested in living in small apartments.
2) In general, urban Asians are comfortable living in CBD apartments. In some major Asian cities like Singapore and Hong Kong, there is no affordable alternative.
3) The Australian Government only allows non-residents to buy OTP properties.
4) Non-local buyers tend to pay too much for property because the asking price may seem like a bargain from where the buyer is from, but it's actually over-priced in the local market. (This technique has been used to sell units at Noosa and on the Gold Coast and Surfers Paradise for decades.)
5) The most obvious market for OTP apartments, particularly the small ones, is overseas Asians because they like living in apartments in the CBD and it's the only property they can buy anyway.
Small OTP CBD apartments in Australia are a bad investment because:
1) The original owner probably paid too much, the rental yield was less than they were expecting, and the strata fees (that pay for the gym and lap pool) are huge.
2) Aussie banks do not like lending on small strata properties, so buyer finance will be difficult.
3) The potential purchaser pool for completed small apartments is small because local Aussies who can buy them will not, and asian non-residents who would buy them cannot.
4) There are apartment blocks just being completed, some nearing completion, and more under development, so the supply will be close to saturation for several years into the future. Capital growth will be small or negative in the short term.
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I'll ignore all the blah blah and say something useful
Kadinsky the reason why people tend to say these are higher risk is:
1. VERY high strata costs. Often with OTP they start high and move HIGHER
2. Limited ability to resell - yes the market for people willing to live in studio is growing but the bank policies aren't so the market for people to buy is smaller. This will also limit it's capital growth prospects
3. Limited market for renters - whilst small living is becoming more popular it still isn't that popular
4. Rental guarantee for one year at 6.5%. What is the market rent for the unit currently without the guarantee
5. Melbourne CBD is about to become awash with many apartments coming on - this high availability will affect rental prices and sales values.
In my opinion I would spend the $300k on an apartment one suburb out of the city which will have better capital growth prospects. Buy a small one bedroom apartment in a blue chip suburb - if you use the services of a Buyers Agent that could find a good prospect for you - it might not have 6.5% return straight away but it is more likely to grow there
I don't know the area too well but I would go for something like this would could have value added with a small renovation and increase the yield that way
http://www.realestate.com.au/property-apartment-vic-richmond-114132079
good advice, but as a Non resident, the OP cant buy this one.
I agree OTP is rarely a good investment, but there are OTP in suburbs outside the cbd, which at least will have a resale value. Id suggest their yeild to be similar to what the city apartments would be after the rental guarantee ends.
I wouldnt bother with a furniture package, most renters in australia have their own furtinture. the ones that dont have any furniture, probably arent the type of renters you want anyway.
Alternatively a house and land package in either the outer suburbs or regional city will have an even better yeild. Capital growth has historically been patchier than closer to the CBD (not IN the CBD), but the increased rental yeild compensates.
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