Queensland’s Red Tide: Juwai's Andrew Taylor

GUEST OBSERVER

Queensland is a lovely place. Chinese buyers seem to be snapping up everything in sight. Why, then, does the Queensland government report that investors from Switzerland, Germany and Holland own more hectares of land than do those from China?

To be fair, the British own even more than these other Europeans. The United Kingdom’s position as Queensland’s number-one foreign land owner is understandable. So, too, is the lead they have on everyone else.

The POMs own more of Queensland than the Swiss, Germans, Dutch and Chinese – put together. That makes sense, because the British have been acquiring land since the days of the First Fleet.

It is the paltry amount of land owned by the Chinese that surprises, given how Chinese purchases have dominated the news over the last few years.

It's not for lack of trying. Since 2011, Chinese have pushed their share of Foreign Investment Review Board approvals for real estate purchases up by more than 50 percent. Last year, Chinese applicants received approvals on a record of $12.4 billion of investments.

On the other hand, Chinese investors have only been buying property in Australia during the last half decade. Earlier, they did not not have the desire, the wealth or the practical ability to purchase property in other countries.

So, while the British had been piling up Australian riches since January 1788, Chinese have only been investing in this country on any real scale since 2010. This helps explain why the Chinese have not yet accumulated the same level of assets as investors from other and much smaller nations.

There is another reason Chinese possessions in Queensland are less than one-ninth the extent of British-owned. Many Chinese buyers are either individual home-owners, or developers.

The developers aren't buying huge tracks of land. They prefer urban sites that are just the right size for an apartment building or two.

Needless-to-say, the individual homebuyers are also purchasing on a one-by-one basis. Many also go on to become Australian citizens, so the property they purchase is no longer owned by a foreign national.

In other countries, as wealth as has risen, so too has ownership of foreign real estate. Most observers expect China to play catch-up over the next decade or two.

China will continue purchasing real estate overseas at a rapid pace, although of course with fluctuations in specific locations.

By 2025, you might expect China to own more Australian property than the Dutch or the Swiss. They may even challenge the British, although I personally think that will take longer.

Andrew Taylor is the founder and chief executive officer of sales and marketing at Juwai.com, the number-one Chinese real estate portal for property in Australia and around the world. Find out more about him here.