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Saturday, April 28, 2012

Off to Perth

The Husband and I are off to Perth this afternoon. We're going over to check out the streets and old buildings in Perth to make ourselves feel better about having bought a 2-bedroom unit in a new development that'll be ready by 2014.

We're very worried about inflationary pressures in Singapore. We're also worried that the housing bubble might burst. I've noticed that developers are much better at selling apartments than owners are. So... for now, with their arsenal of lifestyle brochures and dishonest showflats, developers are managing to sell shoebox apartments like hot cakes. Once these developers have made their money, those who own the tiny apartments may decide that they want to sell. They won't have the sexy marketing machinery behind them. By that time, the reality of living in cramped suburban quarters will kick in. Even people who don't already live there will realize that they don't want to live there if they had the choice of bigger apartments. It's one thing to sell an apartment with showflats that don't look anything like the real flat. It's another to sell an apartment by opening the actual cramped quarters for viewing. The look and feel will be completely different. Seriously too, the doors to foreign talent have closed somewhat. So, there might well be an oversupply of shoeboxes sold to investors banking on renting out to singletons here to make money.

Besides, I believe in contrarian investing. If everyone is rushing for something, then consider doing the opposite. Prices will drop soon... I think. Of course, I may be wrong.

So I began poking around in other countries. We looked at farmland and vineyards. We looked at houses in the suburbs. Eventually, we settled on a 2 bedroom apartment in Perth CBD. We're flying over to really check the place out, and also to explore potential in the suburbs of Perth.

I'm excited. I always am when there is something new to learn or something different that forces me to re-examine my assumptions about how things are done or should be done. Australia, as I found out, is very different from Singapore... and I am fascinated. Besides, The Husband and I were too poor when we married to afford a honeymoon so this will be our very first trip with each other since we got married. There will be no bottles to wash... no child's hand to hold... no having to worry that the little ones will refuse to eat strange food. It'll be a sort of honeymoon, I guess.

When I get back, I'll give you all the details of what we bought and share with you our rationale for buying there... in Perth and in that development.

8 comments:

Blur Ting said...

Oh, this sounds like a good romantic trip! I think you're not wrong in investing. My friend is buying up many properties in Australia and is urging me to do so too. Apparently there isn't enough houses available for university students. It's all good.

eddie said...

Have a safe & fruitful journey. Be sure to check out capital gain taxes in Downunder as a precaution to financially plan for your purchase.

Theanne said...

interested in hearing what you learn about Perth!

Rachel Tan said...

Enjoy yourselves!! I'm eagerly awaiting a holiday alone with the hubby too - it will be a few more years before we think of one.

You will get a better sense after one year of all the costs associated with overseas property ownership. From the lettings and management fees, taxes, maintenance, the market rentals, potential void periods etc.

More importantly, I think you pointed out a pertinent observation on inflationary pressures in Singapore. It's hard to explain - I believe the Govt needs to be watchful as inflationary pressures are slowly but surely causing a huge segment of the population to become disheartened, and perhaps disenfranchised. Currently undergraduates and recent graduates - some have given up hope of getting on the housing ladder, or of owning a car. Retirees are helpless, and worried that their savings are being eroded.

petunialee said...

Ting - Does that mean one is buying in Sydney and Melbourne? I read some market reports that these cities have an over supply of student accommodation.

Might wanna check that first, before you commit?

petunialee said...

Eddie - We have checked the capital gains tax and from what we have found out, don't consider it a show stopper. We'll still have to talk to an Australian accountant for that though.

petunialee said...

Rachel - Inflation is a little scary now. We're trying to hold as little in cash as possible in Singapore because the bank interest rates are too low... and inflation is too high. Best is to buy something with the money and keep the wealth in there.

Malar said...

hope you had a good honeymoon + business trip!