Metro News - Newspaper Online - formerly Toorak Metro News Victoria au newspaper Melbourne south eastern Bayside Melbourne

Baffled by Melbourne’s property market? Thinking of real estate investment but can’t justify current values? For those losing patience with Melbourne’s gravity defying property market (or tired of waiting for a market correction) maybe it’s time to think outside the square, change strategy and Head South East!

No - Not Cranbourne!

In a more extreme deviation in a south easterly direction, the southern most tip of the South Island of New Zealand to be precise, Todd Real Estate in Invercargill recently advertised a timber house sited on an average sized block for NZ$25,000 which at the time of going to press equated to just over A$21,000!

Not exactly the Sunshine Coast, Bluff is only an hour and a bit from The Catlins National Park, a stunning coastal wilderness area and a well visited tourist destination. The town also serves as the port for Invercargill, a fairly prosperous regional city of fifty odd thousand inhabitants.

A few years back, Lonely Planet guidebooks infuriated locals by describing their city as one inhabited by blokes wearing checked shirts and sporting bad haircuts. You want Sea Views and Fashion Sense for 20 Grand?

Tasmania Routed

A couple of years ago, mainland investors went through Tasmania like a swarm of locusts, scouting bargains and ‘neglected’ under valued real estate.
Frank V from Footscray bought a house in Burnie from the net. He said, “The photo looked pretty good and for $70,000 I didn’t even bother going over for an inspection. I just asked the conveyancer to drive past the property prior to settling to make sure it actually existed.” This arrogance was quite common at the time and only exacerbated tenuous relations between mainlanders and locals.

Gwen A from Croydon who got in early and picked up a unit yielding 8% in a fairly non descript suburb of Hobart and doubled her money within a few years said, “As an investment it sure as hell beat buying technology stocks at the tail end of the IT stock market boom.”

In early 2003 I stumbled upon this invasion sitting around the communal lounge room in a Hobart Backpackers- Hostel. Conversations in these places tend to be fairly one dimensional, centered on traveling tales by and large.

However during my stay the guests in this hostel spoke almost exclusively about real estate. Cradle Mountain, Freycinet and Port Arthur weren’t on their agenda - they had lined up appointments with Sandy Bay agents for the duration of their stay in the Apple Isle.

It’s no secret that The Horse Has Well and Truly Bolted as far as Tasmanian property prices are concerned, so our intrepid investors may have to travel a little farther and I wouldn’t be surprised if that part of New Zealand gets to see a few Aussie Tyre Kickers doing the rounds of Invercargill estate agents in the coming months.

Pommy Property Punters

Like Australians, Brits are keen and inveterate real estate investors but somewhat more adventurous when it comes to how far they will travel when choosing locations.
For decades they’ve been buying up places in the sun - South France, Tuscany, the Algarve in Portugal and several Greek Islands. The perennial favourite of Lager Louts, Costa Del Sol in Spain, has seen unbridled development to such extremes that Beacon Cove in Port Melbourne looks like an Eco Village in comparison.

Expatriate Brits in these countries bore anyone within earshot with tales of “I bought my villa for Forty Thousand Quid with a bloody swimming pool and all, Guv”. These markets are well and truly matured, over developed and tainted, so new investment markets have opened up to cater for a more discerning buyer. On the Adriatic Coast in Croatia and the Aegean Coast in Turkey, cashed up Brits are splurging on property in unprecedented numbers.

According to The Economist’s Global House Price Indicator: From 1997-2006, average homes in the UK increased by 176%, in Ireland by a staggering 231%, while the average Australian home has appreciated by only 119%. With such phenomenal capital growth it’s not hard to see why the Brits and Irish are so bullish and not shy to take a punt on a bungalow in the Balkans!

Albanian Time Share Resorts?

A temperate climate, steady supply of cheap beer and a half plausible sales spiel and our zealous British investor will commit to some unlikely and quite bizarre property offerings. In comparison Australian property investors are conservative by nature. Now that’s saying something!

By Fabrizio Marsani - fmarsani@yahoo.com.au