Dream real estate abroad becomes reality
Perhaps you’re thinking New York condo, a luxurious Balinese villa or an apartment by the ski slopes of Queenstown in New Zealand. If you’ve got some spare cash to splash around, the high Australian dollar is making buying property in popular overseas destinations even more attractive than usual.
You could follow the example of Malcolm and Lucy Turnbull, who have purchased in the Big Apple.
Ms Turnbull confirmed this week they had bought an apartment in the art deco Century building at 25 Central Park West.
Home and away … apartments in Queenstown. The price tag for the glamorous two-bedroom apartment with Central Park views was $US3.275 million ($3.1 million).
Advertisement ”The strong dollar and relative values were certainly a consideration,” she told the Herald.
The LJ Hooker executive chairman, Janusz Hooker, says he is seeing two types of trends emerging globally.
A villa in Bali. The first is a wealthy person’s game. ”Instead of buying sovereign debt because of the credit rating, they’re buying super luxury property in London and New York,” he said. ”And you’re getting this extraordinary phenomenon at the high end at Mayfair and Manhattan, where prices have gone through the roof.
”The other game is more for general people … they think ‘wow, I’ve got 50 grand. I might go and spend something in the struggling parts of the US’.”
Yields of 12 per cent were sometimes being guaranteed for three years. ”But you have to look at what’s going to happen after three years: a lot of these towns have turned into ghost towns and squatters have moved in.”
Although he is not getting 12 per cent, Michael Cartwright is happy enough with a 9 per cent yield on a house he bought for $50,000 earlier this year in Cleveland. It is leased for $450 a week and he has a reliable tenant.
Mr Cartwright, 43, who runs a Sydney special events company called Pure Events, was introduced to the idea through a Gold Coast firm called American Property Locator run by his friend Rob Sayler.
”Rob owns three or four … I’ve only got the one but I’m currently looking for a second,” Mr Cartwright said. ”I’ve had money coming into my account every week … that’s a good thing.”
But the strong dollar also means savings on overseas investments and getaways closer to home. One option is Bali, where Australian developer Saxon Looker is building the luxurious apartment complex Sea Sentosa.
On the coast at Changu, about four kilometres north of Seminyak, you can pick up a one-bedroom apartment with ocean views for $US500,000.
The project will consist of 70 apartments – there are also two-bedders from $US950,000 and penthouses at $US3 million – with three beachside restaurants along with a gym and spa. Mr Looker says there have been 40 sales so far, 10 of those to Australians.
”It’s being very well received in Perth, Sydney and Melbourne … probably that represents about 50 per cent of our market.”
As is normal in Bali, the apartments are being offered under a leasehold agreement, in this case a 50-year lease with a 50-year option. ”So quite a long period of tenure,” Mr Looker said. ”Most buyers wonder ‘will I be be dead, will my children be old’ when they’re thinking about this.”
Freehold ”nominee” or ”sponsor” arrangements with Indonesians are possible, although Mr Looker says they are discouraged by the Indonesian government.
Yet that’s the deal that Sydneysiders John and Milu Kulper have with their villa about two hours north-west of Changu at Medewi, a village popular with surfers and artists.
They are reluctantly selling the three-bedroom villa for $495,000. It is on 1800 square metres, and has views over rice fields to the ocean. There had been ”a lot” of interest. ”We’ve got people wanting to go over in September and October,” Mr Kulper said.
”My feeling is that the first person that goes over to see it that is semi-serious about purchasing a property in Bali will buy it.”
But for some, paradise is the New Zealand snowfields, another spot that is attracting strong Australian interest.
The price tag for two-bedroom, north-facing lakeside apartments at Kawarau Village Apartments in Queenstown is $NZ505,000 ($388,000).
”The exchange rate is very favourable and there’s no stamp duty,” said the Colliers International managing director of residential, Peter Chittenden.
There are 70 remaining completed apartments available.
Adrian Snow, of The Professionals in Queenstown,said buyer interest and prices had improved this year.
”Property here had initially devalued about 20 per cent but prices are now less than 5 per cent away from where they were before the global financial crisis,” he said.
Source: Stephen Nicholls