Are you a global or Singaporean investor looking for a property for migration, education, own use, retirement, or a high return on investment?
If so, you might be wondering whether owning a property in Melbourne is profitable compared to owning a property in Singapore.
In this article, we will compare the two cities and provide you with insights and opinions to help you make an informed decision.
Melbourne: A City of Opportunities
Melbourne is the capital city of Victoria, Australia. It is a vibrant and multicultural city that offers a high quality of life, excellent education, and a thriving economy. Melbourne is also known for its world-class healthcare system, cultural diversity, and beautiful parks and gardens.
Why Invest in Melbourne?
Melbourne is a city of opportunities, and investing in property here can be a smart move. Here are some reasons why:
Strong and Stable Economy: The city is home to many multinational companies, and its economy is diversified across various sectors, including finance, healthcare, education, and tourism.
High-Quality Education: Melbourne is home to some of the best universities in the world, including the University of Melbourne, Monash University, and RMIT University. This makes it an attractive destination for international students, which can drive demand for rental properties.
Growing Population: Melbourne's population is growing rapidly; the current metro area population of Melbourne in 2024 is 5,316,000, a 1.55% increase from 2023. This growth is expected to continue, which can drive demand for housing and increase property values.
Affordable Property Prices: Compared to other major cities in Australia, such as Sydney and Brisbane, Melbourne's property prices are relatively affordable. This makes it an attractive destination for first-time investors or those looking to diversify their portfolios.
Melbourne's Property Market
The Melbourne property market has shown mixed performance in the last year. Median property prices over the last year range from $961,000 for houses to $510,000 for units. The city's property market is expected to continue growing, with a projected 10% increase in property prices over the next three (3) years.
Singapore: A Global Financial Hub
Singapore is a small island city-state in Southeast Asia. It is known for its high standard of living, excellent healthcare system, and strong economy. Singapore is also a global financial hub, with a thriving business environment and a highly skilled workforce.
Why Invest in Singapore?
Singapore is a popular destination for property investment, and here are some reasons why:
Strong and Stable Economy: Singapore has a strong and stable economy. The city-state is home to many multinational companies, and its economy is diversified across various sectors, including finance, healthcare, education, and tourism.
High-Quality Education: Singapore is home to some of the best schools in the world, including the National University of Singapore and Nanyang Technological University. This makes it an attractive destination for international students, which can drive demand for rental properties.
Growing Population: Singapore's population is growing, with an estimated population of 5.92 million in 2023. This growth is expected to continue, which can drive demand for housing and increase property values.
Safe and Stable Political Environment: Singapore has a safe and stable political environment, which can provide investors with peace of mind.
Singapore's Property Market
Singapore's property market has been performing well in recent years, with steady growth in property values. According to the Urban Redevelopment Authority, Singapore's private residential property prices increased by 6.7% in 2023. The city-state's property market is also relatively stable, with low vacancy rates and strong rental demand.
Singapore's median private home prices now stand at US$1,200,000 (~S$1,610,300), making them the most expensive in the Asia-Pacific region, surpassing even Hong Kong.
The city's property market is expected to remain stable, with projected 5% increase in property prices over the next three (3) years.
Melbourne vs. Singapore: Which City Offers Better Property Investment Opportunities?
Both Melbourne and Singapore offer attractive property investment opportunities, but which city is better? Here are some factors to consider:
Affordability: Melbourne's property prices are relatively affordable compared to Singapore's, which can make it an attractive destination for first-time investors or those looking to diversify their portfolio.
Property Prices: Melbourne's property prices are generally lower than Singapore's, making it more affordable for investors. However, Melbourne's property market is expected to grow faster than Singapore's, which could result in higher returns on investment.
Rental Yields: Melbourne's rental yields are generally higher than Singapore's, making it more attractive for investors looking for rental income. The gross rental yield for houses in Melbourne is 4.1%, while the gross rental yield for units is 6.7%. In comparison, the average gross rental yields in Singapore stands at 4.63% (Q1, 2024).
Economic and Political Stability
Singapore is known for its strong and stable economy, making it an attractive destination for investors. The city-state has a highly developed economy, job opportunities, and a high quality of life. On the other hand, Melbourne, as the capital city of the state of Victoria in Australia, also offers a diverse and stable economy with a strong focus on education, healthcare, research, and development.
Growth Potential
In terms of growth potential, both cities have their own unique advantages. Melbourne's property market has been performing well, with steady growth in property prices and an expected 10% increase in property prices over the next three years. Singapore's property market has been stable, with experts predicting a 5% increase in property prices over the next three years.
Taxation
In Singapore, foreign buyers and local Singaporeans are subject to Additional Buyer's Stamp Duty (ABSD), which is not applicable in Melbourne. (The ABSD rates for locals depend on the number of properties owned.) Singapore (9%) has a lower Goods and Services Tax (GST) rate than Australia (10%), but Australia offers various tax incentives and reliefs for its taxpayers.
While Australia's personal income tax rate is progressive up to 45%, Singapore's progressive tax rate ends at 22%.
Cost of Living
The cost of living is also an important factor to consider. However, it's essential to consider the overall cost of living, including housing, transportation, groceries, and other daily expenses.
| Indices Difference |
| Consumer Prices in Melbourne are 12.4% lower than in Singapore (without rent) |
| Consumer Prices Including Rent in Melbourne are 20.7% lower than in Singapore |
| Rent Prices in Melbourne are 32.3% lower than in Singapore |
| Restaurant Prices in Melbourne are 18.6% higher than in Singapore |
| Groceries Prices in Melbourne are 6.5% lower than in Singapore |
| Local Purchasing Power in Melbourne is 23.5% lower than in Singapore |
Conclusion
Owning a property in Melbourne has several benefits compared to owning a property in Singapore. Firstly, Melbourne's property market is more affordable than Singapore's, making it more attractive to investors. Secondly, Melbourne's property market is expected to grow faster than Singapore's, resulting in higher returns on investment. Thirdly, Melbourne has higher rental yields than Singapore, making it more attractive for investors looking for rental income. Lastly, Melbourne has a vibrant culture, excellent education system, and diverse economy, making it an attractive destination for migration, education, own use, and retirement.
On the other hand, Singapore has a strong economy, high quality of life, and diverse culture, making it an attractive destination for people from all over the world, including Australians.
However, Singapore's property market can be expensive, and the housing market can be tight, making it difficult to find affordable and suitable housing.
Overall, investors need to consider the different factors in both cities before making a decision.
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