Sydney investors have their sights set on Melbourne apartments, snapping up properties at a growing rate.

Domain Group senior economist, Andrew Wilson says Melbourne is an attractive option for property invest、ors looking for a lower entry point.

“For those investors who are looking outside the Sydney market, inner-city Melbourne suburbs like Richmond offer a similar lifestyle, close to the city, at a lower comparable price point with a similar yield,” he says.

Sydney-based property agent, Erle Cramer says Sydney-siders can’t believe you can buy a new one-bedroom apartment within a few kilometres of the Melbourne CBD “for about half the price of an equivalent purchase in Sydney”.

“Sydney and Melbourne aren’t that different in terms of economy and population size – in fact Melbourne’s population is growing faster than any other state and it is not that far behind Sydney. They are the two powerhouses of Australia,” says Cramer, who is the managing director of Cramer Property.

He says there has been a growing interest from Sydney buyers in areas such as Richmond, which he says is Sydney’s “equivalent of Surry Hills”. “They are similar in distance from the city and in culture – they are both really happening areas. In Surry Hills, when a new development comes onto the market, you would expect to pay about $900,000 for a one-bedroom apartment. In Richmond, you can buy that same apartment for around $460,000.

“For Sydney-siders who know Surry Hills, it just doesn’t make sense, they think Melbourne has a lot of catching up to do. If I was to advertise a new one-bedroom apartment in Surry Hills for $460,000, I would have 5000 people lining up.”

Cramer says he anticipates “a huge amount of interest” from Sydney buyers in new apartments called United Richmond in Melbourne. “The one-bedroom (plus study and car space) apartments are priced from $460,000 which is bound to attract a lot of interest from Sydney buyers, particularly as Richmond has a vacancy rate of almost zero,” says Cramer.

United Richmond is a 111-apartment development on a large site of about 3000 square metres in Burnley Street.  Nestled among period houses and commercial properties, the building has been designed to reflect the heritage of the area.

Director of 360 Property Group, Evan Cathcart says the project is in central Richmond, offering the “quintessential Richmond address” just 100 metres from Bridge Road’s cafe culture and just 600 metres from Swan Street and the Yarra River trail.

“Richmond United is in the most affluent part of Richmond, the central precinct that is popular with white-collar workers who like its proximity to the city and lifestyle attractions. They can walk to an array of restaurants, cafes and bars and there are five train stations and 12 tram routes all within walking distance. The location has a phenomenal walk score of 90,” says Cathcart.

“People also like the way the apartments are spread across what is a relatively large site. There’s a low-density feel about the development.

“We’ve had a lot of interest from Sydney buyers because the returns are so good; there’s the high demand for rental property in the area and the purchase prices are so much lower in comparison.”

The latest data from independent property researchers, SQM Research, shows rents in Richmond have increased by 9.2 per cent in the past 12 months. It also shows Richmond has one of the lowest vacancy rates in Australia, at 1.8 per cent.

Cathcart says a 1.8 per cent vacancy rate is “as close to zero as you can get”. “Basically that 1.8 per cent covers the cleaning time between one tenant leaving and another one coming in.”

ABOUT UNITED RICHMOND

Brian Li of CHT Architects says United Richmond was designed to maximise natural light and ventilation. The podium level is brick to “reflect the context of the area” and blend in with the surrounding Victorian housing. Two towers above the podium are set further back from the street, to break up the building and allow for better views and light.

Interior designer Cindy Rabone of CHT Architects says apartment interiors reflect the “essence of Richmond, being raw and industrial while having refinement and minimalism”.

The north-facing communal garden, by Jack Merlo Design, has barbecues, an outdoor kitchen, lounge area and fire pit.

Source: http://www.domain.com.au/news/sydney-investors-set-sights-on-melbourne-apartments-20150909-gjia66/