Chinese demand will always stay despite marked drop
Jonathan ChancellorDecember 7, 2020
While there’s been a marked fall in Chinese residential property buying across Sydney, the depth of the enrichened 1.4 billion Chinese population means there is always likely to be some demand coming our way.
China has 1,340 high net worth individuals and 568 billionaires. Their combined net worth is equivalent to Australia’s GDP.
The Chinese New Year festivities, currently being celebrated, triggers the biggest international travel period of the year for mainlanders.
In 2017 Australia was the fifth most popular overseas destination for Chinese New Year trips, according to Ctrip, China’s online travel agency.
Chinese residents who are considering buying real estate often use the holiday week to combine fun and a bit of research.
Jon Ellis, the CEO of the Investorist website which sells off the plan properties to Chinese buyers, calls this occurrence "propidays."
Historical data from Realestate.com.au suggests Sydney's eight most popular searched suburbs have been Chatswood and Epping followed by Carlingford, Hornsby, Eastwood, Hurstville, Mosman and Rhodes. Locations with vibrant Asian communities clearly attract the most interest.
Australia welcomed a record 1.3 million Chinese visitors last year, and many are not just tourists — but potentially students, immigrants and property investors.
The Juwai website ranks the top Australian cities for Chinese buyers as Melbourne, then Sydney, Brisbane, Adelaide, and the Gold Coast.
Jawai's chief executive Carrie Laws expects Chinese buying in 2018 to be on par with the levels of 2017, unless something significant happens to change the Chinese or Australian investing environment.
"One reason Chinese investors seek out property in Australia if because of our cost of living," she suggest adding it surprises many Australians as China was still regarded as being such a poor country.
"China's eastern coastal region is just as developed as Australia and its 200 million people live in some of the most expensive cities in the world," she says.
Buyers looks for their own use, plus their investment potential.
Australia's reputation as a world class property investment location with particular appeal for Chinese buyers remains unquestioned, but several factors, here and in China, have worked against its popularity.
These include NSW and federal governments which have increased taxes on foreign property investors.Some developers think the escalation of government changes imposed on foreign property investors risk killing the golden goose.Australia’s Foreign Investment Review Board (FIRB), the Australian Tax Office and immigration officials are now monitoring acquisitions closer than ever to ensure compliance.But divestment order numbers have faded recently.
The most recent NSW divestment was $210,000, one of 14 forced sales of Australian residential properties in the past year.It took the total number of forced sales to 75 across Australia across many nationalities.A further 139 foreign investors have sold properties during the course of ATO investigations.
This article was first published in the Saturday Daily Telegraph.
Jonathan Chancellor
Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.