It’s not uncommon for project marketers in Asia marketing Australian properties to collect deposits from prospective buyers on the spot during exhibitions or seminars. For example, a project in a particular location is being advertised for sale. A buyer walks in and after much persuasion, he decides to hold unit 102 in the development. Some companies practise taking a S$5,000.00 deposit from prospective buyers with their credit card.

However, I must warn all prospective buyers that this process is irreversible. If you walk out of that room thinking you can pull out of the deal and get back your S$5,000.00 deposit, you will be sadly mistaken. In the past 6 months, I have been approached by several buyers ’swindled by a company who has this practice’ for help. One buyer even went to small claims tribunal and appear in front of the magistrate. The company who adopted this practice has been doing it for years. Unfortunately, the agreement is done between a Singapore company and the buyer and is under the Singapore jurisdiction (even CASE couldn’t do anything). Complaints to consumer affairs in various states of Australia didn’t help as well.

As far as I am concerned, every high-ticket item warrants a ‘cooling-off’ period. In the contract of sales, there’s a cooling-off period of 3 days if you purchase anything in Victoria and 5 days if you purchase in Queensland. But even then, those companies that practise taking S$5,000.00 deposits will just rescind the contract. The S$5,000.00 remains non-refundable.

I don’t quite understand some Singaporeans/Malaysians. Why would they pay S$5,000.00/RM5,000.00 extra for the purchase of a property since the price is fixed by the vendor? A lot of them foolishly think that S$5,000.00/RM5,000.00 holding deposit forms part of the 10% deposit. They then realise that is not the case but they have no choice but to go ahead and complete the transaction.

As far as I am concerned, companies that have this practice are just digging their own grave.

Advice: when in doubt, just walk away from the deal. It’s not the project that matters, it’s the people that is servicing you that matters most.

Australia Saturday clamped down on foreigners buying property after complaints that a rapid influx of Asian money had helped make its housing among the most expensive in the world.

The government reimposed tough rules relaxed in 2008 that say temporary residents need permission to buy homes and must sell when they leave, while foreigners investing from abroad can only buy new properties.

The rules are backed by stiff new penalties including compulsory sell orders, as well as expanded monitoring and a crackdown on real estate agents who help foreigners flout the rules.

They follow growing disquiet that ordinary Australians are being priced out of the market after a decade-long property boom that has accelerated over the past year.

“We want to make sure that Australian working families are not being priced out of their own family homes. That is why we have acted in the way in which we have done,” said Prime Minister Kevin Rudd.

“We want to make sure that foreign speculators are not going to force up prices for Australians seeking to buy their own home, buy their first home and we think this is the right course of action.”

House prices have been red-hot in Australia’s major cities, especially Sydney and Melbourne and also Perth, centre of the country’s booming minerals exports to Asia.
Victoria state, whose capital is Melbourne, smashed the billion-dollar (925 million US) weekly sales barrier in March, while Rupert Murdoch’s son Lachlan landed a record 23 million dollar property at a Sydney auction in November.

An international survey released in January found Australia’s housing was the least affordable among six advanced nations including the United States, Britain, Canada, New Zealand and Ireland.

Australia’s opposition has said foreign investors are outbidding locals at house auctions, while media reports refer to cashed-up Asian buyers snapping up homes for their children studying in the country.

However experts also blame a lack of housing supply and say government hand-outs, including grants for first-time buyers, have inflated prices.

If you have not been to the ‘coolest’ part of Melbourne, then it may be time for you to explore the shopping and entertainment precinct of South Yarra. The most prominent street is none other than Chapel Street. A list of interesting sites and buildings are found along this 4.13km trendy strip.

From the Yarra River heading south:

* The Como Centre is a multi-storey office, retail cinema and hotel complex on the north-east corner of Chapel Street and Toorak Road. It is the headquarters of ATV-10 Television. Vogue, a mixed-use development is currently under construction. The residential part of the development will be released in due time. Watch this space for it!

* The Jam Factory is an iconic shopping, cinema and entertainment complex on the corner of Garden Street. More information can be found on http://www.thejamfactory.com.au/

* Just off Elizabeth Street is the Prahran Market, a fresh food market which has occupied its present site for over 120 years.

* The Chapel off Chapel theatre and gallery venue is at the end of Carlton Street.

* Pran Central at the corner of Commercial Road is a redevelopment of a National Trust classified building into a residential and commercial complex with a multicultural food court.

* Greville Street is a small niche shopping strip.

* Prahran Town Hall, on the corner of Greville Street was opened in 1861. The original hall was built in 1861 to the design of local architects Crouch & Wilson in the popular Italianate style of Melbourne at the time, including renaissance inspired interior
spaces. The hall was extended some years later to include a City Hall (1888) in a complementing style. In 1994, after the amalgamation of the City of Prahran with the City of Malvern to form the City of Stonnington, the town hall now functions as the secondary offices for the city council.

* The Prahran campus of Swinburne University is near the south west corner of High Street. There has been quite a number of developments with studios targeting at residences for students in this area.

* The first bowling club in Australia, the Melbourne Bowling Club, is situated behind Chapel Street in Union Street. The club was founded on 11 March 1864.

* The Astor Theatre on the south west corner of Dandenong Road is a Heritage Victoria registered, 1930’s art deco cinema which seats over 1100 people.

* St Michael’s Grammar School now incorporates many of the area’s old buildings.

Download the map from this site. For more information on our upcoming release, VOGUE, please contact me via email.

The Reserve Bank left interest rates at record lows for a third straight month but indicated it has room to make further cuts if necessary.

After a meeting of the central bank’s board, the RBA left its cash rate at 3 per cent, a 49-year low - the same rate that has applied since its last cut in April, which was made in response to a slowdown in the economy.

”It looks as if the RBA is on hold for the longer term,” said Matt Robinson of Moody’s Economy.com. ”There is no real need or desire for further easing.”

Click here for more details.

While property market overseas suffered following the financial crisis last year, the Australian property market has proved to be resilient compared to countries like UK and US. Quoted in a report by The Age on the 25 June 2009, it was reported, ‘While house prices in most other developed economies have tumbled significantly since the global financial crisis, Australian house prices have been resilient, softening only 1.2 per cent in the year to May 2009,” ANZ said, citing data from property value monitoring group Residex.’

While the first homes owners’ grant has fueled the demand for housing in the mass market. the property market is further boosted by record levels of emigration levels due to a large number of Australians returning back to Australia. With major development projects stalled due to shortage of funds, the rental market is set to skyrocket.

For a full report, click Home prices to ‘edge up’ despite job losses

I am back blogging about the Australian property market. Ever since the SMART expo in the March, I have been busy preparing plans for clients. Well, the good news is my biz partner Steve will be back in Singapore in July 2009 for a seminar together with a great pal of mine, Mr. Alexander Wong, director of SAGE private clients pty ltd. My friendship
with Alex went a long way back to 2004-5 when I first met him in Melbourne, Australia.

This time both of them will be present to tackle issues that property investors are concerned with - Taxation and property investment strategies. They come hand in hand because one affects the other. Like what Stephen Covey says,’Begin with the end in mind’. That’s exactly what property investors should do to maximize tax benefits(eventually profits) with a property plan. Both will be discussed and as property investors, you are highly encouraged to attend. Mark on your calendar, 15 July (Wed) at 61 Robinsons Road, ERC Robinson Centre. My clients know I am not really into seminars but I do all these to help equip them with more information so that they understand what they have done ever since they started investing in the Aussie property market.

It will be busy times ahead for me till end of the year. The AUDSGD has recently transacted above 1.1900 which is a sign of recovery. With rising commodity and oil prices, there can only be one direction the AUDSGD is heading - northwards! Baring any unforeseen circumstances, industry analysts are looking at new levels of AUDSGD at 1.2000 by end of the year. Gone were the days where AUDSGD are on par. For those of you who have procrastinated and missed out on the 1:1 levels, you can still capitalize on the exchange now; however time is really not our friend.

Back to work, see you soon!

Download your FREE ebook: Multi-Currency Financing for Non-resident Australian Property Investors

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Australia’s Immigration and Citizenship Minister Chris Evans said the country will need to speed up the visas of migrants especially those in the medical, Key IT, engineering and construction sectors. There was a sudden contraction in the number of skilled vacancies in Australia. The fall in the skilled vacancy index was supposedly the biggest since 1990.

There was already a prevalent shortage of trades people. That contributed to the lack of skilled people in the building and construction sector to meet the demand of the growing population. With strong labour laws and unions, Australia can never ‘import’ cheap labour like what we have done in Singapore.

In the October 2008 issue of the Australian Property Investor (API) magazine, the editor examined the reasons why investors chose to rent instead of having a mortgage over their heads for a place they would own. Personally I felt this is a very important issue, especially for non-resident Aussie property investors to understand. Under the Foreign Investment Review Board (FIRB), non-resident property investors can only buy new off-the-plan or previously unoccupied established residential homes. If resold, they can only resell their properties to Australians or permanent residents in Australia.

Lots of non-resident investors are confused whom they would be reselling to should they need to resell their investment properties in future. One group of people whom they can resell to is property investors who are seeking to increase their portfolio of investment properties. These investors, residing in Australia may be renting but are seeking to expand their portfolio with a good mix of investment properties.

Why would investors themselves rent why they could afford to possibly own a home themselves?

Well, renting gives them the flexibility to live in a suburb they may not be able to afford at this point of time. Rental for residential properties is about 4.5% to 5% but mortgage repayments prior to rate cut in Oct ‘08 are over 9% per annum. Renting needs no maintenance and hence renters need only move their furniture into the newly renovated home and start leading the lifestyle they desire from day one. Besides that, renting does not require a deposit, hence the money saved can be used to increase one’s property portfolio instead of owing a home that doesn’t gives any tax breaks. If a couple works from home, renting also allows them to gain significant tax breaks, allowing them to slice their rent and electricity bills in half and reduce their overall income tax bill. Hence renting does have its clear advantages.

I have witnessed many successful property investors who have in excess of $5million or more in their portfolio but are currently renting. My business partner, Steve is one of them. He rents a 3-bedroom unit in the Docklands along Lorimer Street in Melbourne. For many Asian investors who have acquired properties in Australia this is something they cannot come to terms with. However the reality is that this is the way and it is a common phenomenon Downunder and with concerns of recession looming, more would choose to rent instead of having a mortgage that they would have to pay themselves. So for non-resident investors, hope this is some useful information to you…