正文
The overseas connection
Email Printer friendly version Normal font Large font Susan Wellings
July 12, 2008
Page 1 of 3 | Single page
Foreign buyers ... the $20 million house in Vaucluse.
A $20 million palace in Vaucluse, a $15million mansion in Rose Bay and Craig-y-Mor, Australia's record-breaking $32.4million pile at Point Piper - all snapped up in the past few months by buyers from overseas.
Despite the relatively strong Australian dollar, we're seeing something of a feeding frenzy, with top-of-the-market Sydney property bought by a series of cashed-up purchasers.
Many of them are drawn from the one million Australians living overseas at any one time but still planning to call Australia home - eventually.
Many others are simply buyers from Asia, Europe, the US and the Middle East, looking either for a good investment at a time when prices are soft and a more global spread of assets, or to set up home in a city with a pleasant climate, good schools and a post-Howard, more-international outlook.
PMI Investment Group managing director Sophy Liu says the enthusiasm from China alone for Sydney houses and apartments has taken her by surprise. "We are seeing a dramatic increase in the number of Chinese looking at the Sydney property market," she says.
"They're looking to migrate here, their children are studying here and they want to buy a house, or they want to retire here. Whatever the reason, they're usually very well off, and they're looking for big homes on the harbour, in the eastern suburbs, in the city and on the North Shore."
MONEY TALKS
Wherever the buyers are from, they are having a significant impact on the property market, particularly in the top echelons.
Among the big buyers recently have been Chinese businessman Jiang Mei with Craig-y-Mor; the Chinese buyers of the Pongrass home at Rose Bay for $14.5 million; South African Peter Spyrides buying in Vaucluse for $20 million; and a Shanghai couple buying in Rose Bay for $15 million.
Even lower down, there's plenty of activity. "We're definitely getting a lot of inquiries from particularly expats living overseas," says Barry Goldman, a principal of Raine & Horne, Double Bay. He sold a $2 million apartment to an Australian living in Switzerland, who gave the go-ahead after seeing a photograph on an internet listing. "I think the level of interest has been pretty consistent. A lot of people who've made money overseas are looking to put their money back into Australia, either to have a bolt-hole here or make an investment."
Some are even organising to have existing properties in Sydney sold to enable them to upgrade and buy more expensive houses or apartments.
In the past financial year, an extraordinary 11 per cent of stock sold at Belle Property, Mosman, has been bought by either expatriates or foreigners - although in 2002-03, when the Australian dollar was weaker, that proportion reached 30 per cent.
"It's still significant but with the stronger dollar they haven't had as much buying power," says principal Tim Foote. "I think people have a long-term attraction to Australia and expats always seem to want to come back."
Recently, he sold a $10 million property on the lower North Shore to an expatriate buyer working in the oil industry returning home from London, a $1 million Cremorne home to a Chinese couple wanting an investment and a $5.7 million Kirribilli house to a Hong Kong expatriate.
"Many people go overseas to gain an advantage financially but often they want to return for the lifestyle or to raise children here," he says. Mike Gillan, principal of Ray White, Neutral Bay, agrees that the overseas connection has helped with sales at the top end of the market. "Top notch properties at premium prices are still getting a lot of interest," he says.
Murray Wood, from Colliers International, recently sold nearly $40 million worth of apartments off the plan in the new apartment development Stamford Residences, mostly to expatriates living in Tokyo, Hong Kong, Dubai and Singapore. "They tend to want to buy premium property, and the supply of that is low," he says. "It means at that top end, Sydney is very strong."
LIFE CYCLES
Expatriate buyers tend to follow one of three time cycles, says Katherine O'Regan of property investment group FKP, who formerly worked for the American-Australian Association in New York and the Australian networking group, Advance. Many Australians working overseas, she found, stayed either two years, seven years (before children started school overseas) or between 14 and 21 years (after kids had finished school), before returning.
"Even if they've been living in the US for 20 years, they'd all still talk about returning home," she says.
"They still seem to feel an emotional attachment to Australia and tend to follow that up with a rational attachment - buying property." With money saved from high salaries and lower tax regimes overseas, they are often able to buy more expensive property, too.
The strong Aussie dollar for now is a disincentive but softer property prices coupled with the depressed US and British employment markets often provide a spur to considering returning - and buying in advance. In Britain, it was recently reported that 34,000 Australians and New Zealanders left for home last year, while 400,000 Britons also emigrated, many of them here. As well as the weather, they come for reasonable prices, similar tax scales (tempered by allowances) and favourable capital gains tax provisions - they pay British tax on an investment property at the value it was when they migrated, rather than when they eventually sold.
ANZ recently set up a mortgage scheme for Australians living abroad, whereby they can take out loans to buy property back home at the interest rate of the country in which they live.
"It's becoming more and more popular," says Greg Wray, who is in charge of expatriate mortgages for ANZ in New York.
"That means, instead of paying 9 per cent in Australia, you can pay 4 per cent in America, or even less if you're in Asia. For Australians, where the mortgage rate is the second highest in the world, it's a very good scheme."
Lower rates of price growth are also a lure, says RP Data's Tim Lawless, particularly with the weakness in the sharemarket.
"During 2008, the property market has held steady, while ... the S&P/ASX 200 has fallen by 10.8 per cent," he says.
BUYING FROM OVERSEAS
Australian expatriates and foreign nationals with resident or "special" visas (such as New Zealanders) do not need approval to buy here.
Other foreign nationals need approval from the Foreign Investment Review Board
If they live overseas, they can only buy new properties that have not been previously occupied or vacant land for redevelopment; or are sold a property by a developer with FIRB approval.
If they are a temporary resident for more than 12 months, they can buy existing property, previously occupied.
Source: FIRB
--------------------------------------------------------------------------------
LITTLE BRITAIN
Englishman Simon Nelson jokes that when he married his Australian sweetheart, he promised to love, honour and emigrate. His bride, Ginette, was happy to live in London for a while but had made it clear that eventually she would want to return home.
Fourteen years later, the family, including children Zara, 10, and Sasha, 6, their dog and their cat, have made the move to Sydney. In March they bought a beautiful home in Pymble.
"I first got suspicious when I noticed her bags were packed, and there was a 'For Sale' sign outside our house in London," jokes Simon, 49. "But it's working out fine.
"We made a decision to come over when we did because of the age of our children, so one could slot into year 3 and the other into kindy. We wanted to come over because of a perceived better work-life balance and a healthier lifestyle."
Whether that is the case has yet to be resolved, says Simon, who works in property development. Ginette, 48, who is in banking, says: "Do I do any more outdoor sports since I came over? Probably not, actually. But the girls' schools seem to be a little more sports-focused than in England."
The prices of comparable properties in London and Sydney appear not to be all that much different, either, although there's a bigger variety of styles of properties, and hence prices, in Pymble than there seemed to be in Wimbledon.
Friends, however, have smiled when they have seen photos of their new Sydney home, with its open fireplaces, timber banisters and ornate ceilings.
"They say we couldn't have found a more English house," says Simon. "We've even an oak tree in the garden."
http://www.smh.com.au/news/news/the-overseas-connection/2008/07/11/1215658103745.html
Email Printer friendly version Normal font Large font Susan Wellings
July 12, 2008
Page 1 of 3 | Single page
Foreign buyers ... the $20 million house in Vaucluse.
A $20 million palace in Vaucluse, a $15million mansion in Rose Bay and Craig-y-Mor, Australia's record-breaking $32.4million pile at Point Piper - all snapped up in the past few months by buyers from overseas.
Despite the relatively strong Australian dollar, we're seeing something of a feeding frenzy, with top-of-the-market Sydney property bought by a series of cashed-up purchasers.
Many of them are drawn from the one million Australians living overseas at any one time but still planning to call Australia home - eventually.
Many others are simply buyers from Asia, Europe, the US and the Middle East, looking either for a good investment at a time when prices are soft and a more global spread of assets, or to set up home in a city with a pleasant climate, good schools and a post-Howard, more-international outlook.
PMI Investment Group managing director Sophy Liu says the enthusiasm from China alone for Sydney houses and apartments has taken her by surprise. "We are seeing a dramatic increase in the number of Chinese looking at the Sydney property market," she says.
"They're looking to migrate here, their children are studying here and they want to buy a house, or they want to retire here. Whatever the reason, they're usually very well off, and they're looking for big homes on the harbour, in the eastern suburbs, in the city and on the North Shore."
MONEY TALKS
Wherever the buyers are from, they are having a significant impact on the property market, particularly in the top echelons.
Among the big buyers recently have been Chinese businessman Jiang Mei with Craig-y-Mor; the Chinese buyers of the Pongrass home at Rose Bay for $14.5 million; South African Peter Spyrides buying in Vaucluse for $20 million; and a Shanghai couple buying in Rose Bay for $15 million.
Even lower down, there's plenty of activity. "We're definitely getting a lot of inquiries from particularly expats living overseas," says Barry Goldman, a principal of Raine & Horne, Double Bay. He sold a $2 million apartment to an Australian living in Switzerland, who gave the go-ahead after seeing a photograph on an internet listing. "I think the level of interest has been pretty consistent. A lot of people who've made money overseas are looking to put their money back into Australia, either to have a bolt-hole here or make an investment."
Some are even organising to have existing properties in Sydney sold to enable them to upgrade and buy more expensive houses or apartments.
In the past financial year, an extraordinary 11 per cent of stock sold at Belle Property, Mosman, has been bought by either expatriates or foreigners - although in 2002-03, when the Australian dollar was weaker, that proportion reached 30 per cent.
"It's still significant but with the stronger dollar they haven't had as much buying power," says principal Tim Foote. "I think people have a long-term attraction to Australia and expats always seem to want to come back."
Recently, he sold a $10 million property on the lower North Shore to an expatriate buyer working in the oil industry returning home from London, a $1 million Cremorne home to a Chinese couple wanting an investment and a $5.7 million Kirribilli house to a Hong Kong expatriate.
"Many people go overseas to gain an advantage financially but often they want to return for the lifestyle or to raise children here," he says. Mike Gillan, principal of Ray White, Neutral Bay, agrees that the overseas connection has helped with sales at the top end of the market. "Top notch properties at premium prices are still getting a lot of interest," he says.
Murray Wood, from Colliers International, recently sold nearly $40 million worth of apartments off the plan in the new apartment development Stamford Residences, mostly to expatriates living in Tokyo, Hong Kong, Dubai and Singapore. "They tend to want to buy premium property, and the supply of that is low," he says. "It means at that top end, Sydney is very strong."
LIFE CYCLES
Expatriate buyers tend to follow one of three time cycles, says Katherine O'Regan of property investment group FKP, who formerly worked for the American-Australian Association in New York and the Australian networking group, Advance. Many Australians working overseas, she found, stayed either two years, seven years (before children started school overseas) or between 14 and 21 years (after kids had finished school), before returning.
"Even if they've been living in the US for 20 years, they'd all still talk about returning home," she says.
"They still seem to feel an emotional attachment to Australia and tend to follow that up with a rational attachment - buying property." With money saved from high salaries and lower tax regimes overseas, they are often able to buy more expensive property, too.
The strong Aussie dollar for now is a disincentive but softer property prices coupled with the depressed US and British employment markets often provide a spur to considering returning - and buying in advance. In Britain, it was recently reported that 34,000 Australians and New Zealanders left for home last year, while 400,000 Britons also emigrated, many of them here. As well as the weather, they come for reasonable prices, similar tax scales (tempered by allowances) and favourable capital gains tax provisions - they pay British tax on an investment property at the value it was when they migrated, rather than when they eventually sold.
ANZ recently set up a mortgage scheme for Australians living abroad, whereby they can take out loans to buy property back home at the interest rate of the country in which they live.
"It's becoming more and more popular," says Greg Wray, who is in charge of expatriate mortgages for ANZ in New York.
"That means, instead of paying 9 per cent in Australia, you can pay 4 per cent in America, or even less if you're in Asia. For Australians, where the mortgage rate is the second highest in the world, it's a very good scheme."
Lower rates of price growth are also a lure, says RP Data's Tim Lawless, particularly with the weakness in the sharemarket.
"During 2008, the property market has held steady, while ... the S&P/ASX 200 has fallen by 10.8 per cent," he says.
BUYING FROM OVERSEAS
Australian expatriates and foreign nationals with resident or "special" visas (such as New Zealanders) do not need approval to buy here.
Other foreign nationals need approval from the Foreign Investment Review Board
If they live overseas, they can only buy new properties that have not been previously occupied or vacant land for redevelopment; or are sold a property by a developer with FIRB approval.
If they are a temporary resident for more than 12 months, they can buy existing property, previously occupied.
Source: FIRB
--------------------------------------------------------------------------------
LITTLE BRITAIN
Englishman Simon Nelson jokes that when he married his Australian sweetheart, he promised to love, honour and emigrate. His bride, Ginette, was happy to live in London for a while but had made it clear that eventually she would want to return home.
Fourteen years later, the family, including children Zara, 10, and Sasha, 6, their dog and their cat, have made the move to Sydney. In March they bought a beautiful home in Pymble.
"I first got suspicious when I noticed her bags were packed, and there was a 'For Sale' sign outside our house in London," jokes Simon, 49. "But it's working out fine.
"We made a decision to come over when we did because of the age of our children, so one could slot into year 3 and the other into kindy. We wanted to come over because of a perceived better work-life balance and a healthier lifestyle."
Whether that is the case has yet to be resolved, says Simon, who works in property development. Ginette, 48, who is in banking, says: "Do I do any more outdoor sports since I came over? Probably not, actually. But the girls' schools seem to be a little more sports-focused than in England."
The prices of comparable properties in London and Sydney appear not to be all that much different, either, although there's a bigger variety of styles of properties, and hence prices, in Pymble than there seemed to be in Wimbledon.
Friends, however, have smiled when they have seen photos of their new Sydney home, with its open fireplaces, timber banisters and ornate ceilings.
"They say we couldn't have found a more English house," says Simon. "We've even an oak tree in the garden."
http://www.smh.com.au/news/news/the-overseas-connection/2008/07/11/1215658103745.html
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