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  • Sydney buyers look south

    2019 - 06.13

    A wave of Sydney investors in the Melbourne apartment market is tipped to strengthen in the next few months.
    南京夜网

    Lower prices and higher immigration levels are the lures for Sydney buyers put off by the harbour city’s more expensive entry points.

    Conversely Melbourne investors are increasingly discouraged by new stamp duty regulations which remove discounts for non-home buyers.

    The shift comes as Urbis’ apartment report showed a 40 per cent decrease in apartment sales across Australia in the June 2017 quarter.

    The weighted average cost of an apartment in Sydney rose significantly to $1.15 million – up 13 per cent or $151,000 – whereas prices for inner Melbourne fell by $51,000 to $655,686 thanks to a surge in sales of one-bedroom flats.

    Urbis national director of property economics and research Clinton Ostwald said the price of a two-bedroom, two-bathroom apartment rose by $200,000.

    “Obviously the Sydney market is extremely competitive, and that translates to the apartment market,” Mr Ostwald said.

    Gurner managing director Tim Gurner said buyers from Sydney “are definitely coming and I think they are coming in great numbers”.

    They make up between 25 and 30 per cent of the investor pool he’s dealing with, Mr Gurner said.

    “I don’t think it’s as much as it could be, given Melbourne is so affordable,” he said.

    “Melbourne investors are slowing down because of the stamp duty changes but it’s not putting off Sydney buyers because they are already used to higher prices.”

    Evolve Development managing director Ashley Williams said: “We’ve been seeing it for the past 12 to 18 months.

    “The Sydney market has really taken off and prices have jumped quite significantly. People are looking for more affordable product and they like what Melbourne has to offer.

    “We’re seeing enquiry for Melbourne projects especially from investors who like the price point in Melbourne,” he said.

    “And also in the house and land market. You can get into a Melbourne project for under $500,000 where the same property in Sydney will set you back $700,00-$800,000,” he said.

    Investors are attracted to Victoria’s buoyant economy and population growth. Australian Bureau of Statistics data shows Victoria accounted for 33 per cent of new jobs compared with 20 per cent in Sydney; interstate migration is strong and Victoria’s residential vacancy rate is just 1.7 per cent.

    “We’re seeing an investment migration. There’s an opportunity to buy apartments and houses in Melbourne for significantly less than what one would expect to pay in Sydney,” he said.

    Evolve is now pitching its new Botanic project in Coventry Street, South Melbourne to Sydney investors. One-bedroom apartment prices start at around $425,000 and two-bedders at $655,000.

    Colliers residential sales agent Tim Storey said there are two key drivers behind the shift to Melbourne.

    “Sydneysiders look to Melbourne because of two things. Firstly, the position. Sydney buyers would be paying at least 2.5 times minimum for a comparative product,” Mr Storey said.

    “Secondly, we are finding the typical return for a one bedroom in Sydney is very similar in price per week rent but 2.5 times the price paid. Yields are drastically lower in Sydney,” he said.

    Growland chief executive Ronald Chan said regulatory changes have also put off foreign buyers and his group is starting to focus on the owner-occupier market.

    “Interest from foreign buyers is slowing due to regulatory changes, so the market has adapted to meet the preferences of the local owner-occupier market which is quickly gaining in strength,” Mr Chan said.

    Growland has brought forward the launch of its second building at the $600 million, six-tower Victoria Square project in Footscray in Melbourne’s western suburbs.

    About 90 per cent of the first tower has sold in four months.

    This story Administrator ready to work first appeared on Nanjing Night Net.

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