SIV trickle might yet become a torrent and change the Australian prestige housing market dynamics

Sydney's first known real estate purchase by a significant investor visa holder has been to an $8.5 million Vaucluse mansion buyer.

The ultra-contemporary five-bedroom Captain Pipers Road house (pictured below) was bought by Minqin Wang, whose husband runs a mining transportation company in the Shanxi province, south-west of Beijing. Last month, on approval but before this week's purchase, she told News Ltd papers she wanted to move to Australia because of the weather, her friends who live here, and Australia's strong ties to her home country. Her grandchildren study in Sydney.

"Australia is strongly linked with China - it has a stable economy and social security is stable, it's better than other countries," she said.

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The Wangs are one of less than a dozen approved holders of the significant investor visa which encourages overseas applicants with $5 million or more to invest, typically through Commonwealth, state or territory government bonds, ASIC-regulated managed funds, or Australian proprietary companies. It comes with an entitlement to eventual permanent residency.

Australia's first significant investor visa was granted in May this year to a Chinese toy manufacturer, who invested $5 million in Victorian state government bonds.

To date the much vaunted SIV-effect has been more agent's hype than reality. It will certainly come, but all in good time. The Chinese especially like to take their time.

 The property now sold was actually listed last October through Marion Badenoch of Richardson & Wrench Double Bay when passed in at auction at $8.2 million. And in the interim its street address was changed to a luckier number.

The family was introduced by luxury property specialist Monika Tu of the Black Diamondz agency (???????) to the house designed by architect Kieran McInerney. The vendor was builder Drew Spring who replaced the former red brick apartment block which cost $3.25 million in 2007.

Property Observer recently noted the Immigration Department had received 305 applications for the visa as of last month, with 138 of those in NSW.

It is understood fewer than a dozen have been approved to date.

Some estate agents especially operating at the prestige end of the Sydney and Melbourne markets have been talking about the impact the visa will have on sales and prices for most of this year, but without backing it up with results.

It could be because the government department seems to have almost intentionally dragged the chain on approvals so as to not precipitate local concerns. The Department of Immigration says it will take between six to nine months to process applications.

But the trickle might yet become a torrent as property listings websites are attributing large spikes in searches for Australian property in part to the ‘SIV-effect’. Direct property investment does not qualify as the $5 million investment, but presumably most successful applicants will then have a prestige home on their shopping list.

It then has the capacity to change the housing dynamic of select suburbs in select capital cities across Australia.

The scheme is being heavily promoted throughout China with the Bank of China recently completing a SIV road show of Chinese cities.

The NSW government has been vocal in its support of the scheme given it requires investors put a third of the required $5 million into NSW Investor Migrant Waratah Bonds – the only state to have such a requirement.