Australia is still proving to be a big draw for worldwide investors – especially in the property markets. Despite worries of a bubble developing, a lot of smart money is still ending up in one of the countries that we highlighted as one to watch at the end of last year.
The top ten property sales in Sydney, Australia, have traded hands for more than $250 million, according to a report in Domain.com. The largest sale was for Mandalay, a deluxe mansion located in Point Piper. It was sold to Phillip Dong Fang Lee for $39.9 million.
Second on the list is the $38 million paid by Malaysian-born property developer Seng Huang Lee for a waterfront mansion in Double Bay. However, these trophy homes are just the tip of the iceberg when it comes to the current housing and property markets in Australia.
Much of the property boom in Sydney is attributed to the massive influx of foreign property developers – particularly from Asian markets. It’s a pattern that is being followed up and down the Australian landscape. Property Magazine International reveals that 25% of China’s commercial property investment is in Australia.
Residential property is also a target for the Chinese investment market. Much of it is being snapped up before the general public even sees an advertisement. China Daily report that Australian estate agents are releasing many property opportunities to the Chinese market via social media such as WeChat. The practice is leading to many more inquiries about the properties before they have even been listed locally.
It’s no surprise that Australian property is such a draw to investors. As reported in Business Insider International, almost a third of all sales in the country are making double the original purchase price. Overall, 90% of all sellers made a profit – a safe margin for anyone looking into quick turnarounds in property investment. But are things all that safe? According to some, there could be trouble ahead.
Ian Verrender of The Drum suggests caution. He cites the sale of a parking space on Sydney Harbourside to highlight the ridiculousness of the city’s property sales. The parking area – just 12 square feet large – raised $120,000 for the seller. The article suggests that there is still an element of risk to potential property investors, no matter how rosy the field looks at the moment.
Anyone looking to invest money into property should be thorough in their research. Performing due diligence and seeking out step by step property investment solutions should help reduce some of that risk. Not every property will offer such lucrative returns, after all.
Finally, despite some of the enormous fees trading hands for Australian property, none can hold a candle to the land on sale from the estate of Sir Sidney Kidman. The estate is selling more than 11 million acres of land – more than three-quarters the size of England – for a cool $325 million. Buyers can expect a lot of peace and quiet while enjoying their new land – there are only 150 people living in the entire estate.