Chinese buyers outbid locals at private Toorak auctions

Chinese buyers outbid locals at private Toorak auctions
Chinese buyers outbid locals at private Toorak auctions

Chinese buyers have trumped local bidders for properties in Melbourne’s upscale suburb of Toorak, with more than $50 million of property sold there over the past weeks.

Theses deals include 2 Heymount Close (above) and 9 Hill Street, with the two mansions selling for a combined $31 million at private auctions, according to Fairfax Media.

Buyers’ advocate David Morrell, who bid on behalf of local buyers for these homes, told Fairfax Media that Chinese buyers were back in the market over the past weeks after disappearing for nearly 12 months.

Describing the scenes at the private auctions, Morrell said buyers were bidding against each other through Mandarin- or Cantonese-speaking agents.

Both properties sold well over the reserve — the Hill Street property was on the market at $14 million and sold for about $14.6 million.

The four-bedroom home at 2 Heymount Close — with scope for redevelopment — was on the market at about $16.15 million and sold for $16.72 million.

“We can’t make the numbers stack up,” he said. “It’s not that we can’t afford it, but we just don’t want to be overpaying.”

The marketing for the two properties was done by Michael Gibson at estate agents Kay & Burton.

The purchases by Chinese buyers comes in despite China tightening the screws to contain capital outflows from the country.

The equivalent of $275 billion exited the country via yuan payments through the 12 months to October 2016, versus a $101.5 billion inflow in the same period of 2015, as the Chinese currency weakened to an eight-year low against the dollar, Bloomberg reported.

Last month, Federal Treasurer Scott Morrison had ordered the forced sale of 15 residential properties in Victoria and Queensland bought illegally by buyers from China, India, Indonesia, Iran, Malaysia, the UK and Germany.  Of the 15, six were owned by Chinese.

“Last year there was half the number of transactions as there were the year before — you’ll find this quarter there’s even less,” Morrell said.

“And you only need to drive around Toorak and see why — everyone’s renovating.”

A five-bedroom Victorian terrace on about 1050 square metres at 1 Cross Street is believed to have sold for about $8 million to a local buyer.

Kay and Burton declined to comment on any of the prices, but said three of the four properties were sold to local families.

"Local buyers have been out in force this year, greater than last year,” Gibson said. 

“Not everyone gets off an aeroplane and buys a property — that happens infrequently these days,” he added.

Toorak Chinese Buyers

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