China's cooling measures driving investors to Australian waters

Buyers of Asian-descent flocking to Australia to snap up investment property isn’t breaking news, but buyers of Mainland China have been more predominate in the market lately, accounting for 10% of sales in Viva by Crown.

Viva by Crown was launched in Shanghai and Beijing at the end of August, simultaneously with the Sydney launch, with China accounting for more than $18 million in sales.

Adam Sparkes of Crown Group says there was strong demand from Mainland China with astute investors looking for a long-term property to add to their investment portfolio.

“They’re looking at other countries that offer sound investment opportunities and Australia is viewed as exactly that, a sound investment,” says Sparkes.

The influx of Chinese buyers is a result of many factors, particularly cooling off measures that the Chinese government has instilled to avoid a property bubble.

“There’s significant cooling measures on Chinese nationals buying second and additional properties in China.

“If they own their own home and they choose to then buy a second property for investment purposes, there’s significant tax and disincentives for the Chinese when buying their own second and subsequent properties,” says Sparkes.

“I suppose part of the reason behind that we don’t fully understand, but I dare say it’s to do with reducing the notion of a property bubble in China.

Sparkes says the Chinese government has looked at some cities where properties prices have doubled in a very short time and are looking at potentially reducing the whole notion of having a property bubble in China by putting taxes and disincentives in place.

Sparkes says foreigners tend to go for brand new or off-the-plan because they can buy without having to seek pre-approval to buy.

“Sydney in particular is attractive because it’s perhaps perceived as a financial hub to South East Asia, as it’s only a two hour time difference between China and Australia, compared to other markets such as the UK and US,” says Sparkes.

Other facts include education and the quality of apartments Australia offers.

Viva by Crown is the fifth and final stage of Top Ryde City Living, with one-bedroom apartments priced from $495,000 and two-bedroom apartments priced from $790,000.