Property Hunter Magazine Issue 63- February 2015 | Page 59

Many Sabahans have studied in
Perth and for those who were
fortunate enough to invest in a
property, they would be able to
share with you that should they
sell their property today, the
appreciation value would be able to
take care of the entire cost of their
education. Perth being a well known
education city attracts thousands
of students to its universities and
many Sabahans go to Perth for their
tertiary education. Renting to these
students shouldn’t be a problem as
an apartment in a prime location
in Perth is only at the range of
AUD400K – AUD700K. It’s not much
different from investing in a condo
in KK these days.
Below is a simple calculation on
renting and investing in a property.
SAVE BACK ON RENTAL DURING
CHILD’S EDUCATION:
Eg: 3 students sharing an apartment
•

AUD500 per unit per week

•

AUD2,000 per month

•

AUD666.66 per person per
month

•

Converted to Ringgit: 666.66 X
3 = RM2,000

•

RM2,000 X 12 months x 4 years
= RM96,000

•

RM2,000 X 12 months x 3 years
= RM72,000

Apartment (AUD410K) held for 5
years
Conservative forecast 30% increase
in value
•

AUD410,000 x 1.3% =
AUD533,000

•

AUD533,000 - $ 410,000 =
AUD123,000

•

CAPITAL GAIN = AUD123,000
OR RM 369,000

3. Financing & Currency Exchange
Had I invested in an Australia
property last year as compared to
today, I would have paid a minimum
10% premium. Why so? Last year the
currency was at RM3.20 to AUD1 but
as of today it is only at RM2.90! This is
a good time to capitalize on this huge
savings and hedge our investment
to the Australian Dollar which I
anticipate to be more stable in the
long run as compared to the Ringgit.
In Australia, developers adopt the
Build to Sell concept where they are
not allowed to touch any money
from the booking received as it
is placed under a trust fund that
earns interest for you during the
construction period. A developer
would need to bear all the risks to
complete the project and can only
receive funding from the banks
when they are at an advanced stage
of construction. The current margin
of financing from Australian banks to
foreigners is at 80% for an unlimited
number of properties based on
your financial capability. That’s even
better then DIBS as you pay nothing
during construction.
To take note when you obtain
financing from Australian banks,
they do not look into your Ccris or
Ctos which means your payment
records in Malaysia do not affect
your credibility in Australia.
Let’s also take a look at the risks
involved in investing in Australia.
3 MAIN RISKS TO TAKE NOTE WHEN
INVESTING IN AUSTRALIA
1.

Market value VS Contract
Value

In Australia, it is actually possible for
the property which you purchased
at contract price to be valued
differently upon completion of the
project. Case in point, one of my
friends bought an apartment at
Docklands Melbourne two years
ago for the price of AUD 575,000.
Upon completion this year when the
handing over of the property was

Sabahans residing in Perth and enjoying the lifestyle it has to offer
due, he was informed that the value
of his property is only worth AUD
540,000. That would mean not only
has he lost a value of AUD35,000,
he needs to top up that difference
as his bank loan is not based on his
contract value of AUD575,000!

business might not be doing well or
there could be some unforeseen
circumstances. The risk lies nearer
to the completion date: will we be
financially able to obtain a loan? If
we can’t obtain a loan, then we risk
losing the 10% deposit.

As a foreigner, you are only allowed
to purchase new properties or
off the plan properties. The risk
involved in this is that when the
properties are completed, you
can only sell this to a PR or local
resident. Therefore should you
invest in a property thinking of
flipping it, do ensure that it is
in an area that the locals would
buy from you and not mainly for
the international market only.
For Melbourne, there are a huge
number of apartments being built
within the CBD area but local
resident feedbacks indicate that
they will not stay in the CBD area.
Therefore the challenge is to sell it
to someone who is a local citizen or
PR and wants to stay in the city.

There is so much more to share but
I do not think I have enough space
to write on this edition. However,
do join me when I conduct future
public talks on investing in Perth!
Till then, keep calm and continue to
invest in properties!

2.

Loan approval ne