Investing In Melbourne Property

Disclaimer

This presentation is not to be considered legal or financial

advice. The advice provided on this presentation is general

advice only. It has been prepared without taking into

account your objectives, financial situation or needs. Before

acting on this advice you should consider the

appropriateness of the advice, having regard to your own

objectives, financial situation and needs.

Investing In Melbourne Property

• Why Melbourne?• About Melbourne• Finance• Tax• Legal• Visas• Property Management• The Purchase Process

Why Melbourne?• World’s most livable city 2011,

2012, 2013, 2014*

• Healthcare

• Infrastructure

• Education

• Security

• Culture and Environment

• Sport

*The Economist Intelligence Unit (EIU) Global

Liveability Survey

About Melbourne• Located in the state of Victoria

• Most densely populated state in

Australia

• Second largest city in Australia

(4.17 million people)

• Over 75% of the state live in

Melbourne city

• 66% of Melbourne is Australian-

born

About Melbourne• Fastest growing area in Australia

• 10.5% population increase from

2012-2013

• Districts surrounding Melbourne’s

CBD grew by 15%

• Melbourne growing faster than

Sydney over the past decade

• Over 65,000 new permanent

residents to Victoria a year (2011-

2012)

Economy• Victoria has the second largest

economy in Australia

• Accounts for 25% of the country’s

GDP

• Largest income sectors are finance,

insurance and property

• Largest single employer is

manufacturing

• Fastest growing sector is the

service industry

Education• Melbourne University - oldest

university in Australia

• Monash University – largest

enrolment of nearly 56,000

students

• 30% of student population are

International students

• Over 200,000 international

students in Victoria

Historical Performance• Capital appreciation historical

average over past 10 years

• Apartments – 7% per year

• Houses – 8% per year

• Rental yield 4-5.6+% depending

on location and unit type

• Information openly available

from the REIV (Real Estate

Institute of Victoria)

Occupancy Rate• Amount of homes that are

occupied

• Melbourne’s average over 96%

occupied

• Good rental market

• High number of owner occupied

• KL luxury condominiums have

occupancy rate of only 70% or

less

Regulation• 10% down payment held in a trust

• By Australian regulation, this

money can’t be touched by the

developer

• Upon settlement, this 10% is

transferred to the bank with

interest gained*

• 70% of units must be sold before

developer’s bank loan kicks in

Financing• Local loans allow maximum of 70%

financing

• Australian loans allow 80%

financing

• Australian banks can’t discriminate

on age

• Current interest rate is the lowest

for over 50 years

• Australian dollar weakened with

the Ringgit against the US Dollar

• Interest only loans for up to 15 years

Tax Benefits For Foreigners• Depreciation of fixtures and fittings

over 5 years, i.e. light fittings,

blinds, cupboards, etc.

• Claim property inspection as tax

deductibles (air ticket,

accommodation, food, transport

etc.)

• Borrowing expenses can be

claimed as a tax deductible

• Used to offset your rental income

• Accrue tax credits if you eventually

move to Australia

Stamp Duty Savings• State of Victoria has stamp duty

incentives for buying new

properties

• Encourage new developments in

the state

• Stamp duty is proportional to

construction completion

• Off-the-plan projects, stamp

duty is on land value only

Fees• Body corporate

• Similar to management fee in

Malaysia

• Used to maintain the building or

area that you live in

• Paid by the home owner

• Council fees

• Fees to offset public services

• Waste collection and disposal

services for your neighborhood

• Maintain parks and gardens

• Roads and planning

Conveyancing

• Conveyancing is the process of transferring ownership of a legal title of land (property) from one person or entity to another

• E.g. from developer to purchaser

• Conveyancers don’t necessarily have to be lawyers but usually are

• Prepare, clarify and lodge legal documents – e.g. contract of sale, memorandum of transfer

• Research the property and its certificate of title – check for easements, type of title and any other information that needs addressing

• Put the deposit money in a trust account

• Calculate the adjustment of rates and taxes

• Settle the property – act on your behalf, advise you when the property is settled, contact your bank or financial institution on when final payments are being made

• Represent your interest with a vendor or their agent

Australian Visas• You don’t need a visa to buy

Australian property

• FIRB application is required

• Buying one property does not

qualify you for a residency

• Buying multiple properties to

form a business may qualify for a

business visa

Australian Visas• Foreigners must sell their property

back to a resident

• Choose locations where locals want

to stay

• Foreigners can only buy new

property, not sub sale

• Permeant residents qualify for first

home buyers grant

• Permanent residents can sell and

buy property to anyone

Property Management• Advertise your property for rent

• Show your unit to potential tenants

• Shortlist and filter tenants

• Inspect your unit for defects upon

receiving from the developer

• Collect rental

• Pay any fees from rental

• Organize for fixes on your unit

• Typically 7% of rental is charged as

their fees

Reserve Lot & Booking Fee

Issuance of Contract of Sale

Contract Signed 10% Deposit PaidExchange of

Contract of Sale

Pre-Settlement & Inspection

SettlementKeys Handed To

Client

Engage Conveyancer If Required

Apply FIRB If Required

Apply For Loan If

Required

The Purchase Process

Thank YouFor more information on investing in Australian property,

please contact William Lee at:

William.lee@australproperty.com

+6 018 2388 972