Larry Schlesinger| 1 March 2018| Australian Financial Review
At a time when growing numbers of young Australians are giving up on the home ownership dream and renting for longer, Indian migrants have underpinned the boom in housing in Melbourne’s outer suburbs.
Figures compiled by Red23, a real estate agency that specialises in selling land in new communities, show 33 per cent of all housing lot sales in greater Melbourne – almost 8000 lots a year during the peak of the boom – have been to buyers born in India, compared with 25.8 per cent of Australian-born buyers.
“Unquestionably, there’s strong correlation between our migration trends and the resident profile in our growth area municipalities,” says Red23’s head of research Andrew Perkins, who compiled the data.
“Without doubt, land sales and their peak [in 2017] have been underpinned by the emergence of the Indian buyer.
“On some projects, more than 80 per cent or purchasers are from an Indian background,” says Perkins. “Close to half of all purchasers are professional and well heeled.”
Among them, migration agent Ron Singh is upgrading to a bigger house in Rockbank, a new growth suburb near in Melbourne’s booming outer west.
“It will be a four or five-bedder on a 512 square metre block,” says Singh, who came to Melbourne in 2005 from a small town in Punjab in India’s north and got a masters in accountancy at La Trobe University.
“Indians have a penchant for property and owning their own homes. It’s a matter of pride for them,” he says.
Also in the west, Kuwaiti-born engineer and former Mumbai resident Mohammed Kazi and his wife Gul, who comes from Chennai, are building their first home in Truganina.
“I just couldn’t justify renting and paying someone else’s mortgage for the rest of my life,” says Kazi.
“My friend and I have bought the land in the same estate and are looking to build a house together. Living within our community is important, having friends and family around makes it even better. West feels like home away from home.”
Official government data shows the number of permanent Indian migrants to Australia has surged from just a few thousand a year two decades ago to as high as 40,000. India passed China as Australia’s biggest migrant market in 2012.
That trend matches a surge in new housing lots sales, which hit a record of 24,000 in Melbourne in 2017 and rose above 9000 in Sydney.
In Melbourne, Indians have shown a definite preference for projects located in the west – especially the suburbs of Point Cook, Tarneit and Truganina in Wyndham and Rockbank. The area is home to two Sikh temples and the Sri Durga Temple, Melbourne’s largest Hindu place of worship.
Some of the buying activity has been fuelled by speculation. Developer Nigel Satterley spoke of Uber drivers pooling their money to buy and flip sites for profit. Perkins says he is watching the space closely.
But for people like Singh and Kazi it’s all about buying a lot to build a family home close to friends and their community.
“As soon as they become permanent residents, one of the first things many Indians do is put down a deposit on land. Most of them don’t want to live in an apartment or even a townhouse,” says Singh.
A byproduct of the Indian new home buying boom has been the emergence of an army of Indian-born estate agents whose faces appear on selling boards in the west, north and south-east of the city.
Red23 sales consultant Kunal Advani, who manages the Ellarook Estate in Truganina where the Kazis have bought, has witnessed the influx of Indian buyers in to the western suburbs since arriving in Melbourne from New Delhi as a 16-year-old in 2003.
“They like to build their dream home themselves as they prefer not to settle for anything less, and it’s hard to tick all the boxes when buying an established property,” he says
“They want to own the land and the lifestyle that comes with it – the backyard for the kids and the suburban living.”
Advani says being an Indian agent has been helpful in negotiating sales the Ellarook Estate, which is being developed by the Smorgon-family backed Intrapac Property.
“In some cases, as it is a big decision for first home buyers, they are accompanied by their parents and it helps as I can communicate with them in the local language be it Hindi, Punjabi or Sindhi,” he says.
“We’re certainly seeing the Indian buyers coming through in our estates,” said Max Shifman, chief operating officer of Intrapac,
“They’re at about 30 per cent of our buyers, which is the same as the Indian proportion of new migrants.”
Another developer, Wolfdene, says Indians make up 90 per cent of buyer activity at its Donnybrook estate in the North and 80 per cent at its estates in the south-east.
“They like to live close to their community and friends. They often buy a few blocks close together, it’s quite charming..
“You don’t really have to market to the Indian community, they already know the benefits,” he said.