Starproperty (property arm of Star Media Group) organized a property forum on Melbourne properties. This talk was showcasing a Melbourne property project build by Matrix Concept at Greenvale.
If the name Matrix Concept sounds familiar it is a Malaysian developer famous for developing landed properties at Sendayan, Negeri Sembilan. It seems that they are also involved in property development in Australia and Indonesia also.
This property project located at suburb of Greenvale, state of Victoria. Greenvale is located approximately 20 km west from Melbourne CDB (Central Business District), the agent mentioned that it is approximately like the distance from Subang Jaya to Kuala Lumpur City Center. The property project is called M Greenvale. Total 70 units are for sale and completion date is early 2021.
The estate agent handling this was Buxton, an estate agency based in Australia, their representatives were present during the project briefing.
This is the 3rd preview of the project where the 1st preview was done in Hong Kong and the 2nd in KL Sentral Malaysia. They have so far sold 22 units already. After the preview, the developer intends to do official launch in Australia.
The agent mentioned that the development on the northwest side of Melbourne has potential as most of the development at the east side of Melbourne are price quite high already. He showed that Greenvale area prices are still in the 700K range while other areas at the east side have have reached the 1million range (eg Greensborough, Templestove, Glen Waverly and Clayton)
So far 22 units have been sold since all the preview. Very similar pattern with Malaysia, all the corner units with larger land sizes have been grabbed first.
The agent from Buxton, Rowen Liew explaning about the location of Greenvale. There's a train station (Roxburgh Park) within 6 mins (4.2km) drive and a green reservoir area. There's a mall called Greenvale Shopping Mall nearby. The Melbourne airport is just 25 minutes away.
In this slide below, Rowen mentioned showed the price changes between landed and non landed property in the state of Victoria. Prices were all pretty flat (my interpretation) but non landed seem to have dropped. Apparently it is due to cooling measures done by the government to reduce speculation.
Taxes
Foreigners needs to pay 13.5% tax levy after June 30. Australia property has got property gain tax (called CGT, Capital gain tax) of 30% also with no tenure.
Financing
Normally, no banks or person will finance overseas properties. For foreign banks to finance, they are taking a risk to finance you who is not even in their country, for local bank to finance you, they are taking a risk financing your foreign property which they do not have any valuation information.
For this Australia property, John the MD of Matrix Australia who was present mentioned that while my assumptions are true, there are still some financing options available. Customers on HSBC Premier with a fixed income salary might be able to get a loan on the property. The MD also mentioned that there are private funders that can provide funding at a 6% interest rate.
Terms
FIRB (Foreign Investment Review Board) - An department in the Australian government that is responsible for assessing and giving approvals for foreigners buying properties in Australia. The property purchase needs submit an FIRB application form to the FIRB which will be done by the developer.
SOC (Statement of Compliance) - Equivalent to Malaysia's CCC (Certificate of Completion and Compliance). An approval by local authorities to certify that the property is fit for occupation.
Project Risks
Unlike Malaysia, risk of uncompleted projects is virtually non existent as all monies paid to developer are all held in a trust account and can only be released upon issuance of SOC/project completion. The developer needs strong cash flow to even do the project.
Gotchas
I found out that by Australian property laws, the property cannot be resold to a foreigner. It has to be sold back to an Australian citizen or PR (Permanent resident). As the agents mentioned, this rule applies to both landed and non landed properties. Therefore it is best to buy something that the local Australians want.
Estate Planning
One tip that was explained by John, the MD for Matrix Australia explained that a will is best done also in Australia even if the purchaser already has got a will.
Why buy
These are the points mentioned by the agents
Gotchas
I found out that by Australian property laws, the property cannot be resold to a foreigner. It has to be sold back to an Australian citizen or PR (Permanent resident). As the agents mentioned, this rule applies to both landed and non landed properties. Therefore it is best to buy something that the local Australians want.
Estate Planning
One tip that was explained by John, the MD for Matrix Australia explained that a will is best done also in Australia even if the purchaser already has got a will.
Why buy
These are the points mentioned by the agents
- capital appreciation potential compared to surround areas
- AUD/MYR is at a 2 year low
- landed is preferred over non-landed by the local Australians
- the nearby neighbor hood are million dollar bangalows, potential for these neighbors to scale down and buy smaller units.
I did a check on the location on Google maps to verify the distance and it's around 26km away from Melbourne CDB. The place has got Google Streeview so getting a feel of the location was quite easy. Matrix Concept will no be holding any roadshows once a certain amount of units have been sold and will launch in the Australian market to keep a healthy ratio of investors and self owners in the project.
In the end, I didn't go for it more for personal reasons. Personally I felt that the property was more for people who wants to migrate there. It could turn out to be a good property investment in terms of capital gains but I felt the rental yields (~4%) not not high enough for my risk appetite. For people wanting to migrate there it's good because the location seem like a good place to raise a family, schools, parks, train stations and most conveniences are around. It's also probably suitable for parents who have some spare cash on hand to invest in Australia properties, for children to migrate there or study there. The cash outlay needed also was quite high for my earning capability. However, I did learn a few thing or two about Australian properties and realize it's time to go buy AUZ dollar (it's at a 2 yr low now).
The project webiste is at www.mgreenvale.com.au
