this post was submitted on 15 Oct 2024
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Another building that will have no vacancies and no residents either.
Loads of them in Southbank. Drive around that area around 7-8pm. Prime time of day for people to be home and awake. Entire apartment buildings are 75% dark.
I'm not certain whether this will be the same. I truly can't see how they can be valued at $9.5M. Who the hell is going to buy them? 4 Bedrooms suggests families. But any family with that much to spend isn't going to want their kids on a busy corner and no yard to run around in.
While it's derelict, there's a 4-bedroom house/yard going for $2M a few hundred meters away. You could spend a Million totally renovating that place and really sprucing it up and still move in before this building is finished. And for a third of the price.
Foreign buyers. Simple as that. Buying a property here ensures safety of their money (talking about China specifically). Whether it's buying through a shell corp or a local agent/entity, those places are not there to be lived in. They're just there to safeguard cash.
Not to mention to beef up a property folio for an agency and artificially inflate the value of the building.
From memory, foreign ownership rules have tightened up, but there's plenty of loopholes still.
The land tax component is getting severe for property banking of this sort. Most of Melb's accountants are in panic mode right now with their property investor/developer clients going apeshit over the new requirements. Especially when their trusts need to have a specific 'no benefit to foreign residents' requirement bolted on. There are five different pieces of legislation that discriminate benefits from trusts/super funds going to foreign residents - and the definition of foreign resident is very very broad when you look at all the five Acts.
Ooh, I knew there was changes but not the significance of them. Thank you!
For sure, that's the target market - but the trick only works if the property holds that value in the first place. I don't see 9.3M value here, no matter how you twist and stretch it.
Even if the price drops by 50% when selling, that's still 4.5 million AUD, which is much safer than the CCP taking away all your assets and liquid funds in China.
The security is worth the potential drop.
We may not see it, but banks and buyers will. Those are the parties that matter. It's an absolute shit show but that's the unfortunate reality.