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03-07-2013, 10:53 PM
Interest is Skye high from Asian apartment investors
BY:FLORENCE CHONG From: The Australian July 04, 2013 12:00AM
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Iwan Sunito, chief executive of the Crown Group, whose latest project is the Skye by Crown development in North Sydney. Picture: Nikki Short
THE fall in the dollar will boost apartment sales to offshore investors as a raft of new projects are launched across the country, according to developers.
Asian investors, who have ploughed hundreds of millions of dollars into the Australian residential market in the past year, are expected to capitalise on the dollar's fall from a high of almost $1.06 in January to its present level of about 92c.
"The weakening of the Australian dollar creates stronger buying power for foreign investors," said William Young, Lend Lease's regional sales director, Asia, who is based in Singapore.
Mr Young said foreign buyers looked at the relative price on a per square foot basis against that in their home countries.
"Definitely, the recent 10 per cent fall in our exchange rate helps marketing in Asia," said Iwan Sunito, chief executive of Crown Group, who is in Jakarta to launch his latest project, Skye by Crown in North Sydney.
"Having said that, however, the type of buyers looking at our projects are high-net-worth individuals, who are less sensitive to exchange rate movements.
"They buy apartments priced over $1 million, and multi-million penthouses," Mr Sunito said.
Mathew Cassidy, Queensland manager, project marketing, at Knight Frank, said typically a currency correction of this magnitude would take about three months to translate into sales.
"Those who are looking now may jump at the opportunity to lock in contracts at the current exchange rate - but only after they have gone through methodical due diligence," he said.
He estimated that during the past year Asian buyers, mainly from China, Hong Kong and Singapore, purchased about $400m worth of units in southeast Queensland (Brisbane, the Gold Coast and the Sunshine Coast).
Sales slowed in the past six months due to uncertainty over the euro and the US dollar, Mr Cassidy said.
But he predicted stronger sales in the second half of the year. "I expect we will do better this year than last year."
CBRE's director residential projects, Murray Wood, said that rather than the Australian/US dollar exchange rate, Asian buyers were more sensitive to the relative value of their own currencies versus the Australian dollar.
Australian interest rates, now at a 30-year low, were attractive to offshore buyers who could borrow in Australian dollars, he said.
Lend Lease's Mr Young said offshore investment in Australia's residential market had accelerated in recent years due to strong price growth in Asian markets, while the governments of China, Hong Kong and Singapore had also brought in measures to rein in their overheated markets.
Singapore had brought in eight successive rounds of measures to restrict sales of residential property to investors, according to local agents.
The recent wobbles afflicting global sharemarkets had also prompted high-net-worth individuals to shift their funds to property, with Australia and London the preferred destinations.
Lend Lease is marketing apartments in Barangaroo on Sydney Harbour, The Green in inner Brisbane (on the former RNA Showground site) and apartments in the Elephant and Castle in London, as well as China, Hong Kong, Singapore, Malaysia and Indonesia.
Mr Wood expected between 20 and 30 per cent in the first phase of 159 apartments in Barangaroo would be snapped up by offshore investors. He says quality, well-located projects can expect to generate 20-30 per cent of sales outside Australia.
Since launching its Skye project, the Sydney-based Crown Group has taken deposits for about $20m worth of apartments from investors in Singapore and Hong Kong.
In total, the company has taken deposits for units, valued at $100m in the $230m project, due for completion in 2015.
Agents said that projects worth billions of dollars, including two mooted projects, one valued at $300m and another at $1 billion on the Gold Coast, would be offered to offshore buyers in coming months.
BY:FLORENCE CHONG From: The Australian July 04, 2013 12:00AM
Increase Text Size
Decrease Text Size
Iwan Sunito, chief executive of the Crown Group, whose latest project is the Skye by Crown development in North Sydney. Picture: Nikki Short
THE fall in the dollar will boost apartment sales to offshore investors as a raft of new projects are launched across the country, according to developers.
Asian investors, who have ploughed hundreds of millions of dollars into the Australian residential market in the past year, are expected to capitalise on the dollar's fall from a high of almost $1.06 in January to its present level of about 92c.
"The weakening of the Australian dollar creates stronger buying power for foreign investors," said William Young, Lend Lease's regional sales director, Asia, who is based in Singapore.
Mr Young said foreign buyers looked at the relative price on a per square foot basis against that in their home countries.
"Definitely, the recent 10 per cent fall in our exchange rate helps marketing in Asia," said Iwan Sunito, chief executive of Crown Group, who is in Jakarta to launch his latest project, Skye by Crown in North Sydney.
"Having said that, however, the type of buyers looking at our projects are high-net-worth individuals, who are less sensitive to exchange rate movements.
"They buy apartments priced over $1 million, and multi-million penthouses," Mr Sunito said.
Mathew Cassidy, Queensland manager, project marketing, at Knight Frank, said typically a currency correction of this magnitude would take about three months to translate into sales.
"Those who are looking now may jump at the opportunity to lock in contracts at the current exchange rate - but only after they have gone through methodical due diligence," he said.
He estimated that during the past year Asian buyers, mainly from China, Hong Kong and Singapore, purchased about $400m worth of units in southeast Queensland (Brisbane, the Gold Coast and the Sunshine Coast).
Sales slowed in the past six months due to uncertainty over the euro and the US dollar, Mr Cassidy said.
But he predicted stronger sales in the second half of the year. "I expect we will do better this year than last year."
CBRE's director residential projects, Murray Wood, said that rather than the Australian/US dollar exchange rate, Asian buyers were more sensitive to the relative value of their own currencies versus the Australian dollar.
Australian interest rates, now at a 30-year low, were attractive to offshore buyers who could borrow in Australian dollars, he said.
Lend Lease's Mr Young said offshore investment in Australia's residential market had accelerated in recent years due to strong price growth in Asian markets, while the governments of China, Hong Kong and Singapore had also brought in measures to rein in their overheated markets.
Singapore had brought in eight successive rounds of measures to restrict sales of residential property to investors, according to local agents.
The recent wobbles afflicting global sharemarkets had also prompted high-net-worth individuals to shift their funds to property, with Australia and London the preferred destinations.
Lend Lease is marketing apartments in Barangaroo on Sydney Harbour, The Green in inner Brisbane (on the former RNA Showground site) and apartments in the Elephant and Castle in London, as well as China, Hong Kong, Singapore, Malaysia and Indonesia.
Mr Wood expected between 20 and 30 per cent in the first phase of 159 apartments in Barangaroo would be snapped up by offshore investors. He says quality, well-located projects can expect to generate 20-30 per cent of sales outside Australia.
Since launching its Skye project, the Sydney-based Crown Group has taken deposits for about $20m worth of apartments from investors in Singapore and Hong Kong.
In total, the company has taken deposits for units, valued at $100m in the $230m project, due for completion in 2015.
Agents said that projects worth billions of dollars, including two mooted projects, one valued at $300m and another at $1 billion on the Gold Coast, would be offered to offshore buyers in coming months.