Real estate agents and mortgage brokers have revealed they are noticing a larger clientele of Indian, Malaysian and Singaporean property buyers seeking out suburban homes in Melbourne
It’s often been said Chinese property buyers are dominating Australia’s real estate scene, but experts say a different investor with an unexpected approach is overwhelming one state’s housing market.
Australia’s property scene has experienced a 2. 7 per cent jump in the number of new homes being purchased by international buyers in the first quarter of this year.
Consequently, the market share for this category now sits at 7. 9 per cent, with real estate experts claiming about half of these are Chinese buyers – particularly in Sydney.
However, property specialists in Melbourne have since come forward saying another type of homebuyer is increasing in the city’s western suburbs.
Real estate agents and mortgage brokers have revealed they are noticing a larger clientele of Indian, Malaysian and Singaporean property buyers seeking out suburban homes in Melbourne.
Just under 784,000 individuals with Indian ancestry reside in Australia, of which 38 per cent live in Victoria, which has the largest Indian population in the country.
The trend comes after Victoria saw 2757 foreign property transactions between July 2020 and June 2021, of which 389 were valued over one million dollars.
And it’s anticipated this number will surge in coming years with experts predicting the nation’s population will increase by 900,000 people by the end of June 2025.
But despite Victoria embracing diversity, Melbourne property specialists say the rise in foreign buyers could come with dire consequences. Real estate investor and entrepreneur Hari Yellina told news. com.au there are several reasons why Indian buyers choose the Australian property market.
This spans from Australia’s educational system to the nation’s political scene, with other motives including the lifestyle, employment opportunities and long-term capital growth.
“Australia is known for its world-class educational institutions, which draw a large number of Indian students,” Yellina said.
“Many Indian families invest in Australian properties to provide accommodation for their children studying there or to capitalise on the growing demand for rental properties among students.”
Migration and familiarity is another reason why Indian buyers particularly choose Melbourne, with many purchasing a home in a bid to obtain permanent residency.
“The presence of a large Indian community in Australia may offer a sense of familiarity and support for new migrants and investors,” Yellina said.
“This factor, combined with the widespread use of English, makes Australia an accessible and comfortable choice for Indian buyers.” Mortgage broker Heni Kwan, who ran as an independent for the seat of Werribee in the 2022 Victorian state election, added there’s been a push politically to strengthen the relationship between the Australian and Indian community.
“(The government) are pushing for the relationship between Australia and India to be stronger and by bringing a lot more students from India here to study … they’re (giving them an incentive) to stay here,” she told news.com.au.
Melbourne’s west has quickly become a hotspot for Indian buyers, with the latest census data revealing the substantial number of people with Indian heritage living in these suburbs.
Truganina appears to have the largest Indian population in the west with 32. 6 per cent of people in the community of Indian heritage.
This is followed by Tarneit, Point Cook and Cranbourne where about one-in-five people are Indian, and Craigieburn, Clayton and Glen Waverley where about one-in-ten people have Indian ancestry.
“Overseas Indians are allowed to buy new properties, and students or new migrants tend to initially purchase homes in areas with higher Indian population concentrations,” Yellina explained.
“However, once they settle down and have children, they often relocate to well-established suburbs.” Meanwhile Kwan noted Altona Meadows, Werribee, Hoppers Crossing and Wyndham Vale also have a large Indian population.
“People living in these suburbs are predominantly Indian who have an owner-occupied home, so it’s no longer just one suburb – it’s now six or seven and it’s growing,” she said.
While Yellina said most homebuyers in the Indian community tend to “take advantage” of Australia’s banking system, Kwan and Melbourne Raine & Horne real estate agent Anna Dao have noticed some clients seek support from the “bank of mum and dad”.
“The majority of Indians understand the concept of leverage in the property market and take advantage of the Australian banking system,” Yellina explained.
-
Some business-savvy Indian investors look beyond the residential property market and rather come to Australia to invest in commercial properties or large lots of land they can subdivide and build on
-
Yellina said 7-Eleven and fuel stations are the most popular commercial investment pathway for Indian buyers that double up both as an investment and place of work
“They often opt for an 80 per cent Loan-to-Value Ratio (LVR) and are diligent about repaying their loans on time.” Kwan begged to differ saying some of her clients who had just moved to Australia didn’t have genuine savings, and instead asked their parents for help with paying a deposit on a home.
“Some of my clients have called their parents back home to say, ‘Hey, I need a deposit at least equal to this amount,’ and then they will send money through to Australia for their child’s house purchase,” she said.
Meanwhile, Dao added not all Indian buyers were necessarily wealthy, but rather had a good sense of financial planning.
While most Indian buyers purchase their home as an owner-occupied property, Yellina says there’s an increasing number of homeowners who are opting to lease their house opposed to selling it when upgrading to a bigger property.
“After purchasing a property, Indians in Australia often live in it for some time before upgrading to larger and more upscale houses,” he said.
“They typically retain their previous property for investment purposes (as) the Indian diaspora rarely sells acquired assets, with the exception of large acreage blocks.” As for the types of properties Indian buyers invest in, the property guru said off-the-plan properties and single dwelling homes with extra bedrooms are of particular interest.
“Townhouses and apartments are generally less popular investments among Indians. However, a minority may opt for them due to their proximity to workplaces in city centres or because they are more affordable than single-dwelling homes,” Yellina said.
Some business-savvy Indian investors look beyond the residential property market and rather come to Australia to invest in commercial properties or large lots of land they can subdivide and build on.
Yellina said 7-Eleven and fuel stations are the most popular commercial investment pathway for Indian buyers that double up both as an investment and place of work.
***********************************************************
Readers
These are extraordinary times. All of us have to rely on high-impact, trustworthy journalism. And this is especially true of the Indian Diaspora. Members of the Indian community overseas cannot be fed with inaccurate news.
Pravasi Samwad is a venture that has no shareholders. It is the result of an impassioned initiative of a handful of Indian journalists spread around the world. We have taken the small step forward with the pledge to provide news with accuracy, free from political and commercial influence. Our aim is to keep you, our readers, informed about developments at ‘home’ and across the world that affect you.
Please help us to keep our journalism independent and free.
In these difficult times, to run a news website requires finances. While every contribution, big or small, will makes a difference, we request our readers to put us in touch with advertisers worldwide. It will be a great help.
For more information: pravasisamwad00@gmail.com