Tips for getting the most from Chinese property expos: Ivy Xiao
More than 40,000 visitors turned up to the recent Shanghai Overseas Property & Investment Immigration Expo, which was attended by ACproperty.com.au to promote Australian properties in China.
An investment booklet, co-published by Property Observer and ACproperty.com.au, Australia’s allure for Asian residential property investment, was distributed to visitors.
Many developers and real estate agents receive invitations from various overseas property expos in China.
What exactly should they be expecting from such shows?
My tips are:
- Lifestyle is more important than price.
Most Chinese investors do not consider Australian properties as their “investment”. Unlike most of us, when return of investment is the key reason of buying property, most Chinese buy property in Australia because they would like to send their kids here to study in the future, or they would like to migrate to Australia. Also, they like Australian property because they think Australia is a safe place to keep their assets.
What does this mean?
The surrounding of the property is more important than the medium price for the suburb. Make sure that your expo team has lived in Australia before and knows the surroundings of the development very well. It is more important to sell them the lifestyle rather than focusing on product price.
Hiring casual sales staff in China who have never visited Australia will waste your and your investors’ time.
Attend expos to get exposure, not sales.
It is true that all the visitors at expos are serious buyers; they will spend an hour (sometimes even more) to go through all the details about a property with you. However, it is very unlikely that you will get a sales contract signed during an expo.
They might have prepared a list of questions before they come to the show but they are usually not prepared to sign a contract during the expo. They gather as much information as possible and ask as many questions as possible to various exhibitors. After the show, they will continue their researches, and then make a decision. Sometimes, they might even fly to Australia to have one last look at the site before committing, so it is important that you have a local presence to receive them when they visit.
What does this mean?
Make sure you have a nice brochure with your contact details for investors to bring home. Try to get their phone numbers or emails so that you can follow up. Or make sure that your property has an online presence where they can contact you directly if they lose your details. Most investors prefer to leave their email address instead of their phone number, mainly due to privacy issues, so it is important that your contact details are easy to find!
Never rely on an expo to hit your next month’s sales target. You might wait for three months before you can convert these potential buyers to a real deal.
The key is to take the expo as part of the company marketing’s budget, attend these expos regularly; eventually you will have a reputation among the investors and would have gathered a strong database. We noted that the most successful exhibitors are always the ones that are committed to participate in such expos for an extended period of time.
- Rental returns versus capital gain potential.
Rental return from Australian properties is more attractive to most Chinese investors than capital gain potential. Due to mainland China’s property booming over the last two decades, Chinese investors are too used to record capital gain (100% in three years’ time). Therefore, they are hardly impressed by our annual 10% increase. However, when it comes to annual rental return, Australian properties are much more attractive. For example, if you buy an apartment in Shanghai for $AUD1 million, you will be lucky if you could fetch a rental of $1300 per month. That’s only around 1.5% rental return per year.
What does this mean?
Always inform your client what the expected rental return of your properties if they told you the capital gain forecast is too low. If they/their kids would like to move to Australia, you might want to remind them what’s the amount of rent they need to pay if they do not buy a property.
Ivy Xiao is director of ACproperty.com.au
