Why rich Chinese buyers like Barangaroo: Juwai's Carrie Law

GUEST OBSERVATION

You may know that the suburb of Barangaroo is very popular with offshore buyers. Australian expats living overseas and foreign buyers from other countries — especially China — love this little corner of Sydney.

Why do they love Barangaroo so much, and what does it mean for you? 

James Pratt knows the suburb as well as any auctioneer. His firm, JPA Group, is located in one of the area’s new commercial towers and he has worked in the area from the opening.

“It seems like every time we have an auction booked in Barangaroo, the property sells prior,” he told me.

“Barangaroo is an excellent market for sellers, because you’re not limited to one kind of buyer. The buyer urgency goes all around the world. You’ve got both occupiers and investors. Few areas of Sydney have that kind of wide appeal.”

Jane Zhao, Sales Director and Principal of Mango Real Estate, recently set a record price for a two-bedroom apartment in Barangaroo.

The apartment is on a low floor and came with a parking space. Both the vendor and the buyer are owner occupants from mainland China.

Zhao said, “This home sold for a record price of $3.5 million in just one week. The buyers wanted to take occupancy quickly, so they didn’t care about historical transaction prices. They valued speed.“

“The owner and buyer had very similar tastes,” said Zhao. “They both loved this apartment because of the low-floor water views, which are very hard to find anywhere else in Sydney.”

Zhao believes Chinese buyers are the market to go to with Barangaroo listings. 

“I used Juwai.com to penetrate the Chinese market. They have cash. Everything is cash. They don’t need loans. I have many more buyers who want to purchase in Barangaroo, but there just isn’t enough inventory.

Other agents are also selling Barangaroo apartments at markups. Matthew Mifsud, a Sales Agent with Raine & Horne City Living Pyrmont, has closed several transactions for prices significantly above the most recent prior sales price.

“A three-bedroom penthouse apartment in 17 Barangaroo Avenue was purchased off-the plan for $3.995 million and just resold for $5.5 million.

“A two-bedroom apartment I sold at 21 Barangaroo Avenue sold for $3.0 million in February 2018, after being purchased off-the plan for $1.875 million.”

Mifsud also sold a one-bedroom apartment at 25 Barangaroo Avenue for a 15% gain after just 13 months.

Barangaroo is even attracting Chinese buyers from other parts of Sydney, including Chatswood.

Joanne  Dai, a former investment banker who is Sales Executive at Century 21 City Quarter, has helped Chinese buyers move from Chatswood to Barangaroo.

“My client told me she loves Chatswood because of the Chinese influence there,” Dai said.

“But in Barangaroo she wakes up every morning with an amazing view of the Sydney Harbour. It reminds her why she chose to live in this country.”

“Barangaroo is expensive, but it offers a rare opportunity to own an iconic property along the Sydney Harbour. The last time we had such an opportunity was in 1998, when the Bennelong apartments were offered to the public. That was 20 years ago. Who knows when the next opportunity is going to be?”

Auctioneer Pratt noted that, “Barangaroo sprinted to about 15% capital gains in 2017, much better performance than in most of the rest of the city.” The average sales price in Barangaroo is $2.9m, 78% higher than in nearby Pyrmont.

According to Mifsud, Barangaroo apartments are well proportioned, with a typical two-bedroom having about 100 square meters of internal space. 

“That’s 20 to 25% better than in Lendlease’s Haymarket development, Darling Square,” he said.

“Some of the two-bedrooms in Barangarooo actually have two car spots,” Mifsud said, “which is almost unheard of.”

The huge demand for Barangaroo homes is ironic, because when promotion began there, more than one Chinese buyer told our team that they were unsure about the location. Now, if LendLease could magically produce another apartment building in Barangaroo, it would fill up with happy buyers in just a few weeks.

The marketing material from one of the buildings says it best: “Sydney is now the place everyone wants to call home,” and Barangaroo is the suburb where they want to live.

Carrie Law is the CEO and director at Juwai.com.