Interesting piece by Stephen Nicholls in the Age (Chinese prefer Melbourne to Sydney) that illustrates two aspects of Australian life, Chinese investment in Australian residential property playing out in the traditional rivalry between Melbourne and Sydney.
A survey of Chinese interest in investment in international property ranks Australia as number two after the US. That's actually remarkable in its own right. However, what attracted special interest was the apparent ranking of Melbourne in front of Sydney as favoured investment location. The photo from the Age shows a Toorak house purchased by a Chinese investor for $14 million.
Sydney people were not impressed. I quote from the story:
Sydney property agents expressed shock, then disbelief that Chinese buyers appeared to be more interested in Melbourne than Sydney.
"Melbourne's a great place to visit but I wouldn't want to live there and I think the Chinese feel the same way, said Richardson & Wrench Mosman principal Stephen Patrick. "Most of the Chinese want a water view and Sydney obviously wins there."
I am not in a position to comment on the relative attractiveness of the two cities beyond a wry smile. I can comment on Chinese interest in the area in which I currently live in Sydney. It's high and has been so for a long time. The driver here is the presence of the University of New South Wales with its large Chinese student cohort. This creates both rental and home purchase demand, for many parents buy a place for their children and as a longer term investment.
We are not talking top tier demand prepared to pay multi-millions for specific locations, rather mid tier demand in a price range from $A750,000 to $A1,500,000. The effects are quite noticeable. This is not a complaint, simply an observation.
16 comments:
Oh the old Melbourne-Sydney rivalry! I should explain that both my parents come from Sydney, all my extended family lives in Sydney and my sister and I were born and bred in Melbourne (my parents moved there after they married as it was the first place where they both got jobs after graduating from uni).
Anyway, I have had all my Sydney relatives explaining why Sydney is superior since I was knee high to a grasshopper. And when I was younger, Melbourne *did* have an inferiority complex. I remember a family friend saying to me when I was 10, "Sydney is so much better than Melbourne, we have the Opera House, what do you have?" All I could think of was the Arts Centre, and she taunted, "I don't even know what that is."
However, in recent years I think Melbourne has become comfortable in its own skin. I believe it is the most European of the capital cities. It may not have flamboyant beauty like Sydney, but it has hidden beauty.
I dunno why Sydney people get so anxious about the idea that Melbourne has good points, and why they need to prove that they're the best all the time. The fact of the matter is that they are both great cities and that they both have good points and bad points. Why does one have to be "better" than the other?
Nice story, LE. I don't mind the rivalry. Melbourne got very complacent and then suffered the indignity of seeing Sydney overtake it. Then Sydney got complacent, quite ridiculously so. Nothing like wounded complacency to create a sense of outrage - and sometimes action!
I don't mind the rivalry either 'cause I think both are the human equivalent of those little cylindrical cages we torture mice and hampsters in. Compare both on a wet and windy day, when all the umbrellas are pointed forwards, and all the tempers are homicidal. Or get a life, and don't.
But anyway, people choose where they live for a variety of reasons, and good luck to them if they like cheese. My simple hope is they don't also suffer through the continuing saga of regulatory inaction - such as this:
http://www.smh.com.au/business/rural-savers-hit-as-gippsland-lender-teeters-20130722-2qdud.html
- yet again, for the nth time.
kvd
ps there does actually exist a tiny, thus far thankfully undiscovered, part of Australia. I refer to it as 'not Sydney, not Melbourne'. I'm sure it's on a map somewhere.
Thought you would have noticed that one, kvd. And as to that part of the map not Sydney, not Melbourne? Look for the blank spots with the here be dragons signs. Perhaps a new business for you, looking after dragons?
Dragons I could handle. It's Sensis I'm having trouble with at the moment.
More to follow for your enjoyment after I carve out the merely libelous bits :)
kvd
I live near Hurstville, pretty close to being a second Chinatown.
My gay friends feel safer that it is now Chinese dominated.
I look forward to it kvd. On the Gippsland problem, the newspaper reports suggest a different from those other ones. errors but more conservative management.
Interesting comment, Evan. Specifically on Hurstville, hasn't it changed?!
Hi Jim
When you say "more conservative management":
- are you suggesting that freezing a mere $150M in funds is much better than what has gone before?
- or are you saying that it's an improvement that the managers of same have 'rung the bell' much earlier than the other yahoos?
Must be something else - because I'm sure I'd agree with either application of the word 'conservative'.
kvd
... not sure ...
kvd
Second. Based just on the paper reports, and barring a depositor run, they were solvent in cash terms in that they could meet debts as they fell due. However, the potential loans created a longer term solvency risk. So board and trustee acted.
Seriously Jim?
"they were solvent in cash terms in that they could meet debts as they fell due"
... so in their own words:
"GSI has therefore decided to suspend further redemptions of 'at call' and term investments."
That term "at call" refers to your dear old mum's next rent, or electricity payment, or food.
"further redemptions" just puts a glossy legalise over yet another failure by the 'conservative' management to actually... conserve.
kvd
My grandparents used to live just near Hurstville! Yes, it's changed massively.
Oh, and I'm rather piqued by your idea of a kind of competitive advantage between Melbourne and Sydney. Maybe they keep each other sharp (and everyone else irritated???_
LE, a few years ago I went to Hurstville for a meeting and it was like being in another country. I'm not saying that's bad, just that it was a culture shock because I hadn't been expecting it!
Sydney and Melbourne work and interact in their own zones and in so doing play of each other. I can see advantages in that. But for me, has little relevance to the aspects of Australian life that I am especially interested in. They are like Greek city states sitting on the land edge exercising an influence on their hinterlands, but not really very relevant beyond that.
I understand your point, kvd. It goes back to the discussion about gearing ratios, risk, regulation and choice.
kvd, while this thread is off-topic, I couldn't help noting from today's Financial Review that the firm in question did have lower than recommended reserves and a high arrears problem. That supports your case. On a related matter, I see that Banksia is likely now to pay out 85c in the dollar.
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