Hello all,
Given the current boom we are seeing in house prices all over the country, it is no surprise that Chinese investors are jumping into the market by the bucketload. Many of these Chinese investors are choosing to invest in large complexes of OTP apartments in growing areas, including those with already large proportions of Asian populations. Companies such as Property Investors Alliance and Ranlan Property Group are selling not only the OTP apartments themselves, but are also packaging together a management service whereby the company also hires property managers to handle the day to day mechanics of the ongoing investment.
My question here is this; given that most members of Somersoft know that 99% of OTP investments are duds, when will we see these local and overseas Chinese investors who are buying up these newly built complexes suffer for their folly? Will it be after this current boom is over - or will it be in 10 years time?
The reason why I'm asking this is that I know of a few friends of family who seemingly have made a lot of money from buying OTP products. One who bought an apartment in the notorious "1 Railway Parade, Burwood" made about 200K in equity and then has plunged that money back into the market and bought another 3 OTP products. They seem to be convinced that making money is this easy, just to hand cash over to a developer/company, they pick the product, it goes up in value and then they buy more. In my head I'm thinking, how is this all happening?! They have bought what we know at heart are overpriced homogenous housing and making a fortune from this, whereas I am still stranded here with my package in my hands too scared to make a decision.
What I also want to know is what the reality of this situation is and the long term effects of this on housing trends? Is it that Chinese investment into these OTP is merely them ultimately subsidising the rent of people who live in these apartments and/or will it have an impact on the supply of housing in the particular area, whereby future investments in unit based housing in the area will be untenable due to the flooding of supply?
Given the current boom we are seeing in house prices all over the country, it is no surprise that Chinese investors are jumping into the market by the bucketload. Many of these Chinese investors are choosing to invest in large complexes of OTP apartments in growing areas, including those with already large proportions of Asian populations. Companies such as Property Investors Alliance and Ranlan Property Group are selling not only the OTP apartments themselves, but are also packaging together a management service whereby the company also hires property managers to handle the day to day mechanics of the ongoing investment.
My question here is this; given that most members of Somersoft know that 99% of OTP investments are duds, when will we see these local and overseas Chinese investors who are buying up these newly built complexes suffer for their folly? Will it be after this current boom is over - or will it be in 10 years time?
The reason why I'm asking this is that I know of a few friends of family who seemingly have made a lot of money from buying OTP products. One who bought an apartment in the notorious "1 Railway Parade, Burwood" made about 200K in equity and then has plunged that money back into the market and bought another 3 OTP products. They seem to be convinced that making money is this easy, just to hand cash over to a developer/company, they pick the product, it goes up in value and then they buy more. In my head I'm thinking, how is this all happening?! They have bought what we know at heart are overpriced homogenous housing and making a fortune from this, whereas I am still stranded here with my package in my hands too scared to make a decision.
What I also want to know is what the reality of this situation is and the long term effects of this on housing trends? Is it that Chinese investment into these OTP is merely them ultimately subsidising the rent of people who live in these apartments and/or will it have an impact on the supply of housing in the particular area, whereby future investments in unit based housing in the area will be untenable due to the flooding of supply?