There’s an upcoming project in inner city Melbourne. It will be located on 17-21 Harcourts Parade, Cremorne; a suburb 2km SE of Melbourne CBD. Located by the riverside, this 11-level building boasts 182 apartments with both river and CBD aspects. It also has extensive podium facilities consisting of a gym, recreational garden and also a theatre. Secure undercover car parks and storage are available for residents and there’s an additional benefit of a live-in building manager for ease of maintenance.

If you look the site for the development, you will find the units facing the river to be just in front of a 4-lane freeway. Yes, that’s monash freeway(M1) and to add to that ‘congestion’, there’s the Harcourts parade lane, making it 5 lanes in front of the development.

But all’s not that bad. I learnt that the developers are building winter gardens for all the balconies for units facing the river/freeway. In case, you haven’t heard of winter gardens (like myself), it’s a balcony with glass to the top of the ceiling and double glazed. That provides the first level of sound attenuation. The entrance to the balcony from the living areas will have glass doors that are double-glazed as well. So imagine yourself, sitting in the living room, watching television or listening to Norah Jones after a days’ work. All you could hear is the music and the 2-level of sound attenuation will virtually block out 99% of the noise.

Last year, I stayed in my business partner’s apartment at 80 Lorimer Street (one of the developments by Mirvac). The bedroom I was putting up faced a 8-lane freeway (west gate freeway) and there wasn’t any barriers in between. So the room was exposed to the high traffic flow during peak hours. The irony was that it was so quiet with the double-glazed windows that there was hardly any noise. And for your information, the apartment was on the 11th floor!

Overseas buyers will be limited to only a small percentage of the buyers due to banks’ lending policies now. The indicative prices* are as such:
1-bedroom from $385,000*
2-bedroom from $490,000*
2 bedroom plus study from $750,000* onwards

This development would be ideal for investors as their 2nd or 3rd investment property as it’s off-the-plan. More details will be posted once I have them. To indicate your interest, just indicate your name, tel and email me at info @ pagreal.com(without spaces).

In an internet report by domain.com.au, the median price of apartments in the last 12 months to October 2009 is $432,000 and a long tend trend of 6.7% growth per annum.

Ranked one of the most liveable suburbs in Victoria, South Yarra has outperformed many other suburbs within the 4km radius as the ‘preferred suburb’ to live in for professionals in Melbourne. In a report published on the 20th August 2005 to rank suburbs in Melbourne, fourteen indicators, from crime to entertainment, were used to rank each area, writes Martin Boulton.

According to Melbourne 2030 — the State Government’s strategy for accommodating an extra million people in Melbourne in the next 25 years — sustainable housing, shops and access to services will shape the future of our suburbs.

But while affordable housing is the key factor in where people live, other factors including crime, access to schools, restaurants and entertainment help explain why people move to, or away from, a particular suburb.

The authors of the Liveable Melbourne report, commissioned by The Age, looked at the characteristics that help define our suburbs and developed 14 indicators to try to quantify what constitutes liveability.

“As you move around Melbourne, the ability of the place to provide all things that are important to people — shops, schools, parks — varies considerably,” said co-author Dr Daniel Terrill.

So how did each suburb perform across transport, proximity to the CBD and the coast, culture, traffic congestion, education, shopping, open space, tree cover, cafes and restaurants, topography and crime?

Raw data in the form of Australian Bureau of Statistics findings, crime figures, bus routes, etc was collected for the appropriate indicator and then collated to give each suburb a ranking from one to 314, with one being the highest ranking for each indicator. If a suburb had no crime at all, for example, it was judged the best performing suburb on the crime indicator, making it number one on the list of all 314 suburbs for that indicator.

Once each suburb had a ranking for each indicator, the ranking was converted into a score between zero (lowest) and five (highest) to produce a total indicator score. South Yarra, for example, scored a five on seven of the indicators, for a  total indicator score of 53.

The lower ranking suburbs were mostly on Melbourne’s outer-suburban fringe and scored poorly on most of the indicators, particularly access to public transport.

These included, in no particular order, Hallam, Sydenham, Lysterfield, Kilsyth South, Cranbourne North and Bayswater North. A condition of the survey was that suburbs outside the top 150 would not be ranked.

Terrill said it was “implicit in the scoring methodology” that each indicator had equal weighting in the total score.

“Liveability is a subjective term … but having decided upon the indicators the rest of the process has been highly objective,” he said.

Iain Butterworth, a senior lecturer in the School of Health and Social Development at Deakin University, welcomed the findings but said a liveability survey should ideally include an analysis of the social values built into those environments.

“Going ahead we need to build liveability into our suburbs,” he said.

“South Yarra is No.1 because it happens to be close to the city, is close to trams, trains, entertainment (and) wealthy people can afford to live there, but is it a healthy suburb?

“Just because Rosanna came in at 150 doesn’t mean it’s a less healthy place, or the people there care less about each other than a suburb ranked somewhere near the top.”

Vogue South Yarra apartments are positioned at the heart of Chapel Street, Melbourne’s
most stylish shopping, dining and entertainment precinct. VOGUE, a mixed-use development made up of both splendid shopping and residential apartments above it is set to be one of the most iconic tower in the prestigious suburb of South Yarra.

South Yarra needs no introduction. Chapel street is analogus to Orchard rd of Singapore with desirable lifestyle options. It’s a place where most of the young, high-income earners yearn to live in.

From an investment perspective, gross rental yield should be slightly higher than 5% for selected units(with carpark) and according to homepriceguide, the median price of units has grown by 7% between March 2009 and September 2009 and currently the median price of units in the suburb is $442,000.

Property managers have reported that units take roughly 3-6 days to be tenanted the moment an application is received from a prospective tenant, hence the vacancy period of units in this are is reduced dramatically.

Full specifications and cashflow analysis can be produced upon request. We don’t think the entire development suits investors but at least of handful of the units would do well from an investment perspective. Just drop me an email and we will take it off from there.

Have a awesome week ahead!

Australia’s central bank unexpectedly raised its benchmark interest rate from a 49-year low by a quarter percentage point amid signs the nation’s economy is strengthening. Reserve Bank Governor Glenn Stevens increased the overnight cash rate target to 3.25 percent from 3 percent in Sydney yesterday.

Only one of 20 economists surveyed by Bloomberg News forecast today’s decision. The rest predicted no change. Australia is the first Group of 20 nation to raise borrowing costs since the start of the global financial crisis more than a year ago. Rising job vacancies, retail sales and house prices, plus surging business and consumer confidence support Stevens’ view the economy is accelerating enough to scrap the bank’s “emergency” rate setting.

“It makes sense for the Reserve Bank to start the tightening cycle at the earliest opportunity,” Stephen Walters, chief economist at JPMorgan Chase & Co. in Sydney, said ahead of today’s increase, which he forecast. There has recently been “a near uninterrupted stream of healthy economic data.”

Governor Stevens, who cut the benchmark lending rate by a record 4.25 percentage points between September 2008 and April to cushion the economy against fallout from the global credit squeeze, said on Sept. 28 that compared with past recessions, “this has been a good episode for Australia.”

“In due course, both fiscal and monetary support will need to be unwound as private demand increases,” Stevens told a Senate committee in Sydney.

Whilst there’s no prefect investment property in any location in this world, I found an interesting development lately which I thought was reasonably ideal for investors looking to build or grow their property portfolio. ‘Ruby’ apartments consists of 116 residential apartments over six levels with a combination of 1 and 2-bedders in the development. Located in Richmond, a suburb 3km to the east of Melbourne CBD, this development presents an opportunity for investors to add something unique to their portfolio.

Home to the MCG and the Rod Laver Arena(venue for the annual Australian Open), Richmond is the sporting hub for Melbourne. Best known for its bargain designer and seconds shopping along Bridge Road and Swan Street, vibrant Richmond is also the place to go for Greek or Vietnamese food, languid all-day breakfasts and great live music.

Richmond is one of the Melbourne’s earliest settlements and these days is where many of Australia’s finest fashion designers have their factory outlets and seconds stores – pick up bargains at Mimco, Country Road and Atelier. Stop on Swan Street or Bridge Road for lunch in a restaurant or café, many of which offer a genuine taste of Greece. Church Street is the place to go for designer furniture and objets d’art. Try for a booking and savour the tastes at stylish mod-Oz restaurant, Pearl.

Nearby Victoria Street, or Little Saigon, is the heart of Melbourne’s Vietnamese community. Wander among the long stretch of eateries, bakeries, butchers, fishmongers and grocers and grab a bite along the way. Don’t expect white linen tablecloths and hovering waiters – Victoria Street is about the hustle and bustle of fast, fresh and exceptional Asian food at a bargain price. Bars and live music thrive in Richmond, the Corner Hotel being one of Melbourne’s most famous intimate live-music venues, hosting big-name bands alongside obscure newcomers. Just across Swan Street, Dizzy’s Jazz Club is known for its quality acts. Sip a cocktail in refined surrounds at Der Raum, or celebrate the hops and tour the Carlton & United Breweries’ brewhouse in Abbotsford.

From the city, you’re just 10 minutes from Richmond. Take the number 70 tram from Flinders Street to Swan Street or number 109 from Bourke Street to Victoria Street, number 48 or 75 from Flinders Street to Bridge Road. Alternatively, jump on the  train and travel just one stop from Flinders Street Station.

‘Ruby’ apartments(yellow shaded area) are located just across the road from Victoria Gardens Shopping centre, one of the regional shopping centres in Victoria under the Centro Properties Group. There’s Ikea, Coles, Cinemas and Kmart within the shopping centre and a hosts of restuarants and cafes that go along with it.

With all these fundamentals in place, one can be forgiven for overlooking the fact that Richmond used to be a Vietnamese dominated community and had a stigma for not being one of the most desirable areas to live in. However, the community is changing rapidly, being close to some of the most expensive suburbs like Kew, Hawthorn and East Melbourne, it is no wonder this suburb has become more popular with young professionals working in and near the city.

If you would like to find out how this development is going to fit into your property portfolio, don’t hesitate to email me. Have a great weekend ahead!

Elm consists of units for owner-occupiers and investors. What investors need to be careful of in elm, apart from buying a unit with a view, is to ensure that the numbers for your investment property ’stack up’. What does it mean by ’stacking up’?

You want to ensure your holding cost is kept to the minimum so you will need a unit with the highest possible rental yield. The 1-bedders would be renting anything from $380-$420/week in the current market. If the 2-bedders top $570/week in rent currently, for a 5% rental yield, you shouldn’t be getting anything more than $592,800 in unit. Otherwise you will find outgoings like interest cost, body corporates eroding away your returns.

All our investors in elm got 1-bedders in there. That’s not to say 2-bedders aren’t good. It’s just that the yield won’t be as good as the 1-bedders. And that’s what I have concluded from my years of investing in Australia.

Email me your comments at info@pagreal.com

Elm is a 22-storey development by Fridcorp. Launched early last year, construction has already started on this development located along 18-24 Dorcas Street. I visited the site in June 2008 and back then there was a display unit being constructed under the old building for the purpose of marketing the units. Essentially, the development consist of 1 and 2-bedders, and the first four levels are parking lots for residents and visitors to the development. The fifth floor is where the pool and the gym are located together with eleven 1-bedders and six 2-bedders. The building has similar floor plate for levels 6,8,9,11-15; apparently the floor plates were somehow improved and they are a little different from the time they were launched last year.

I can only say that more 1-bedders were created in these levels, and being close to the city it is quite a sensible thing to do. On the east of the development is a 18-storey building (you can quite easily verify that on google earth) so if you are after the views of the Domain Oval next to the Botanic Gardens, you will have to go higher up(at least above 19th floor). On the western side of the building, it is literally unblocked. So if you go higher up (15th floor and above), you will get bay views. The southerly aspect of the building (facing Dorcas Street) will have views to the Albert Park Lake (famous Australian Grand Prix circuit) while the northerly aspect looks back to the city with nice city views. However there might be a chance that some of the older buildings around it might be demolished for a new tower.

I have a fairly good understanding of the development; the latest update from the developer is as such:

Construction works are proceeding on schedule.
Piling is complete, the basement slab and walls have been poured.
Part of the ground floor tenancy slab has been poured and the jump form is being erected to the lift core.
At this stage, the project is on completion for late 2010.

For some of you who are in Singapore and wants to have a chat with me for a more independent view of the development and the original price list, you may contact me at 98344408 or email me at info@pagreal.com.

Have a great weekend ahead!

A number of property investors asked me if there’s a need to purchase parking lots in developments in or near to the CBD. My answer is a straightforward ‘YES’. My business partner told me he hasn’t known any Australians without a car. In fact, ALL the Singaporean friends who have migrated over to Melbourne or are currently working there on a long-term basis own a car. The reason is pretty simple. Australians have a certain lifestyle to upkeep and geographically it’s impossible to travel around the state in public transport within a short period of time.

What if someone lives and work in the CBD? Does he need a car?
YES!!

What’s he going to do over the weekend? Only 5% of the population works in the CBD. It’s not a huge proportion compared to those working in the suburbs. Most Australians work outside the CBD. The tenant wants to have the luxury of moving around over the weekend. If you have bought an apartment along Chapel Street, or St. Kilda road without a car space, your tenant base will be significantly smaller. Having been in this business for the last 5 years, I have learnt that as property investors, the two most important group of customers you have to aim to satisfy are the banks(1st) and your tenants(2nd). If you choose to ignore what your tenants really want, you will be in for a surprise - not a pleasant one I can guarantee.

Good luck folks!

It was a Friday evening and hordes of investors streamed into the function room at level 44 in The Sail@Marina Bay. Thanks for Forex Asia Academy, we were able to hold this event at the tallest residential tower in Singapore.

My business partner, Steve was present to answer questions that were posted when participants of the forum registered online. The response was indeed encouraging and from the feedback that we got from the audience, there’s still a very strong level of interest amongst Singaporeans as far as Australian property investment is concerned.

One of the all-time favourite questions that was poised to Steve, who has a huge portfolio of residential properties in Australia was if the time is right now for property acquisition. Steve’s answer was pretty simple and straightforward. ‘It all depends on your property plan’, he says. As circumstances for different individuals differ, the time for property acquisition for one may not be for the other.

If you wish to find out more about property plans, you may contact me at +65 98344408.

Have a great working week ahead!

With the Reserve Bank of Australia cutting rates, the official Cash Rate in Australia is just 3.25%. The mortgage rates have dropped to just a little over 5% for investors who are on standard variable rates.

Investors are looking to lock in their rates once the official Cash Rate drops below 3%. I see a perfect opportunity to acquire residential properties in Australia with positive cashflow at least for the next 5 years, provided you have loans that are disbursed between now and 2010. The rental yield for residential properties is about 5% and with mortgage rates falling below 5% or even 4%, rental income will be more than the outgoings, thus increasing your cashflow. Besides with the AUDSGD at below 1.0000, there hasn’t been a much better time to acquire residential properties in Australia.There’s a small window of opportunity. However there are risks involved. Here are some of the reasons why you SHOULD NOT look into acquiring properties NOW:
1.    You don’t have instant equity now.
The best approach now is get into House/Land that can be built between 6-9 months. Loans will be disbursed at the time when Cash Rate is low; hence fixing your interest rate for the next 5 years means positive cashflow for you.

2.    You are highly suspicious that prices of properties in Australia will drop. House/Land packages are basic housing required in Australia. If you acquire a House/Land in the region of $320,000-$350,000, that’s pretty close to replacement cost. The risk of prices sliding further is minimal.

3.    You are worried if banks will ask you for ‘margin calls’ if property prices dip.
Singaporeans can relate to prices of properties dropping 20% and banks asking owners to ‘top up’. In Australia, banks don’t practice that. As long as you keep up with your interest repayments, banks don’t do margin calls for property investors.

According the Australian Bureau of Statistics, Melbourne is growing at a rate of 1000 people per week and developers are just not building enough houses to accommodation the growing population. The recent bushfire in regional Victoria further deepen the need to increase the supply of accommodation for residents in Victoria.  In the current credit environment, financing for big projects can be a challenge for developers and we have already seen developments stall because of lack of financing.

House/Land packages may be a good option for investors to get into the market quickly. Like Warren Buffet says, ‘Be fearful when others are greedy and be greedy when others are fearful’. I see more upside rewards than downside risks in the current market.