What do you think of Perth?

In the past decade or 2, thousands of Malaysians have migrated to Australia. Mostly for their children's education apart from economic reasons. I believe in the years to come, thousands more will emigrate if this government is going to continue screwing up our education system.

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Australia is a big country, with multiple centers of economic development, unlike Malaysia or Thailand where everything is centred around Kuala Lumpur or Bangkok. Last night I asked a fellow property investor in Perth, which city would be the best bet to invest in Australia? She replied that in terms of economic development, whatever happens to Sydney will replicate in Perth despite Sydney being a much larger and higher populated city.

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Like KL, the past few years we have seen major appreciation in property values in Australia. Rent has increased too. Until recently, this upward climb has somewhat halted and we are now seeing the beginning of a decline. The Aussie Dollar has also depreciated more than 25% in the past few months against the Malaysian Ringgit. Not that the Ringgit is performing well, in fact it hasn't. So, this goes to show how badly impacted the Australian economy is from this global recession.

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Does this mean it is a good time to invest in the Australian property market? Certainly few years ago, if one has invested in Australia, one would have made a lot of money on 2 fronts:

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1. Buyers generally pay a 10% deposit upon signing the SPA and pay nothing until the building is completed in 2-3 years time. Back then, property prices were on a steady upward climb and one can sell the property upon completion with a tidy profit without even having to fork out the remaining 90% - no bank loans, no severance penalties, no headaches

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2. The Aussie Dollar (AUD) was also on a steady upward climb. While one paid the 10% deposit on an exchange rate of RM2 per AUD, at the very peak the AUD reached RM3.50. Hence the profit from the sale plus the deposit are repatriated at a higher exchange rate.

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For many reasons including ones above, in my opinion Australia remains a good investment destination for properties. One can look at the prospects from these 3 angles:

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1. Australia has some of the world's best universities and tens of thousands of foreign students are enrolled each year - hence the demand for students' accommodation is always steady and constant. Obviously, one can invest for their own children's education as well - better than paying somebody else rent for the 3-4 years of studies which can amount to a tidy AUD7800 per year @ AUD150 per week. If your children study for 4 years, the savings from accommodation could amount to over AUD30,000. You can also sublet additional rooms to other students and then keep the property for rental income or sell it at a high profit upon your kid's graduation. Like Malaysia, it is highly unlikely that properties near to universities will depreciate in value (unless you got them at a very unreasonable price in the 1st place).

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2. I've been here for 3 days and all my wrinkles are gone... It is certainly a very nice place to live with very few frustrations that you get in KL. There are rolling hills, green park land and scenic water ways all calling for some sort of recreation even in between working hours. One can walk safely down the road without any hassle such a broken walk ways or smelly illegal dumps. The quality of life is certainly there for those looking for a place to retire. In fact retirement homes and villages are a big sell here, with hundreds of thousands of well heeled immigration for that purpose.

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3. Australia is also a pleasant place to work. This 3rd reason is probably less prominent lately with thousands of retrenchments each month. However, if you are coming in here with business ideas and capital investments, I am sure the government would welcome you with more than an open arm. The economy is bound to recover one day, with opportunities for everyone...

For what reasons would one choose Perth?

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Well... It is only 5 hours by plane from KL, the nearest point in Australia from Malaysia... (cos you don't really want to be in Darwin..). In the next bit, I will go into more detail of what we can expect to see in Perth. Stay tuned and please leave your comments...