Sydney home market now 'too hot', says billionaire developer
Billionaire Lang Walker, founder of one of Australia's largest private developers, said home prices in Sydney and Melbourne have climbed too much, and he is turning his focus to his investment in Malaysia.
"Sydney is a little too hot at the moment," said Walker, executive chairman of Walker Corp. "Melbourne has gone through a period of intense growth and that's plateaued off." The residential market in Brisbane, in Queensland state, still had some potential, he said.
Dwelling prices in Sydney jumped 14.8 per cent in July from a year earlier, the fastest growth among all Australian state and territory capitals, according to the RP Data-Rismark Home Value Index. Melbourne prices rose 11 per cent, the second-fastest increase, and Brisbane gained 6.9 per cent.
Walker, with A$12 billion (HK$86.6 billion) of planned property projects, said he was looking to increase investments in the Johor region in southern Malaysia after putting in about A$2 billion in the Senibong Cove project. Walker was in talks for further investments in the city of Johor Bahru as he bet that demand from neighbouring Singapore would increase, he said.
Singapore residents are crossing over to Malaysia's Iskandar region as they seek property, labour and amenities, often at half the cost or less. Economic growth and soaring immigration have strained Singapore's resources, making it one of the world's most expensive places to live.
With cheaper land plentiful in southern Malaysia, money is pouring across the border. Singapore has invested at least 11 billion ringgit (HK$26.8 billion) in Iskandar Malaysia, a special economic zone in southern Johor established in 2006 that is three times the size of the city.
Walker is converting land, previously used for prawn-breeding farms, into upmarket apartments. The project was expected to be valued at about A$7.5 billion along with an adjoining plot it would develop with a Singapore-based firm, he said.
"It's the leverage off Singapore," Walker said. "Singapore is very expensive. We can create and produce a product which is similar to what you get here in Singapore or Australia."
Walker Corp made its foray into Asia in 2008 with a 5.5 billion ringgit investment to develop Senibong Cove, a waterfront residential project.
Walker was developing Australia's largest commercial project, Collins Square in Melbourne, valued at about A$2 billion he said.