Post to SinFongChanRE.Wixsite.com on 18/4/2018 3:22 AM
Commenting on “Melbourne apartments face resale issues”
https://www.domain.com.au/news/melbourne-apartments-face-resale-issues-as-experts-report-saturation-of-stock-20180417-h0ywhn/
I have been warning about investing in apartments in Melbourne and other interstate cities. I do not make such warning lightly. For many migrants from Hong Kong and Southeast Asian countries, they come with very fixed mindset that apartments will give them good capital growth despite unsatisfactory rental return.
Just so happen that I had dinner with some Hong Kong friends, and the subject on property popped up in our conversation. Most Hong Kong people live in high rise apartments, and some high end apartments are priced at HKD 50,000 per sq ft. On the other spectrum, it still costs HKD 1,500 per sq ft. No one expected property prices could soar so high after GFC. I asked a rather cynical question, “if no one expected such increase, can the reverse take in the future?”
Hong Kong experienced big property price slump before, and many faced bankruptcy leading to committing suicide. Not unlike Melbourne, many countries face housing affordability crisis. Young people just do not have the ability to raise the initial down payment for their home. Those with aged parents who own a property or two, are able to chip in.
The population of Melbourne and Sydney are still relatively small, and the growth rate is far below the rate of apartment availability. In the past decade, far too many apartments have been built to lure investors from overseas or newly arrived migrants. The prices are above the asset worth. Such demand hype also attracts local buyers who think they know property investment inside out after attending a few free seminars.
Property prices in Melbourne will continue to fall, and the apartment prices will take more punches. The initial investment may be small, but the long term return may be just negligible.
Thank you fro reading.
Commenting on “Melbourne apartments face resale issues”
https://www.domain.com.au/news/melbourne-apartments-face-resale-issues-as-experts-report-saturation-of-stock-20180417-h0ywhn/
I have been warning about investing in apartments in Melbourne and other interstate cities. I do not make such warning lightly. For many migrants from Hong Kong and Southeast Asian countries, they come with very fixed mindset that apartments will give them good capital growth despite unsatisfactory rental return.
Just so happen that I had dinner with some Hong Kong friends, and the subject on property popped up in our conversation. Most Hong Kong people live in high rise apartments, and some high end apartments are priced at HKD 50,000 per sq ft. On the other spectrum, it still costs HKD 1,500 per sq ft. No one expected property prices could soar so high after GFC. I asked a rather cynical question, “if no one expected such increase, can the reverse take in the future?”
Hong Kong experienced big property price slump before, and many faced bankruptcy leading to committing suicide. Not unlike Melbourne, many countries face housing affordability crisis. Young people just do not have the ability to raise the initial down payment for their home. Those with aged parents who own a property or two, are able to chip in.
The population of Melbourne and Sydney are still relatively small, and the growth rate is far below the rate of apartment availability. In the past decade, far too many apartments have been built to lure investors from overseas or newly arrived migrants. The prices are above the asset worth. Such demand hype also attracts local buyers who think they know property investment inside out after attending a few free seminars.
Property prices in Melbourne will continue to fall, and the apartment prices will take more punches. The initial investment may be small, but the long term return may be just negligible.
Thank you fro reading.
