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Interim planning restrictions and a tepid apartment market could hit foreign owners of premium land plots in downtown Melbourne
Shifting market conditions could spur a wave of land sell-offs by Chinese owners who have overpaid dearly for prize plots in downtown Melbourne.
Michael Hanschen of Point Polaris says Chinese investors have been paying excessive sums for plots of land in coveted parts of downtown Melbourne due to in market inexperience for quite some time now.
“Over the past two to three years, real estate agents have been flogging large parcels of city sites for astronomical prices to new entrants to the market who don’t understand it completely,” said Hanschen.
“Large-scale companies or companies considered institutional in China might send some guys down here to acquire a piece of land, and the agents put together very competitive auction processes that leave investors with very little time to actually do much due diligence, if any. As a result they’re hit with outrageous land prices.
“We had a guy in here recently that bought a $16 million piece of land in the southern suburbs after just being here for three days. I think he’s popped down one or twice to Australia before, but essentially this is his first time in the country, and that’s common.” […]