Australian property hot for Chinese buyers

Australian property hot for Chinese buyers

Wed, 14/03/2018 - 13:02
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Melbourne Chinatown

ON THE MOVE: Chinese New Year is a favoured time for consumers to go abroad and consider investing closer to Australian landmarks like Melbourne’s Chinatown. Photo: Shutterstock

More than three quarters of Chinese travellers will consider buying property overseas in 2018, according to research by international property portal Juwai.com.

Juwai recently released its Chinese Consumer International Travel Survey 2018, which indicated 92 per cent of Chinese consumers anticipated taking an overseas trip this year.

Of those travelling consumers, Juwai said 77 per cent had property purchase intentions, with 60 per cent saying they would buy property, and 17 per cent would evaluate the possibility.

However, Juwai said Chinese buyers liked to keep their options open when determining investment destinations.

“Eighty-one per cent disclosed they have researched in two countries or more, with 56 per cent professing having spent more than a year on researching properties in the countries,” the report said.

“Clearly, the Chinese are an astute and well-informed group of buyers who are not only meticulous, but also discerning enough to do their homework well in advance before finalising on a final investment destination.”

The US was the top investment destination for respondents, followed by Australia and Asia.

The consumer research followed a report released last month by global commercial property agency Knight Frank, which found that a third of Australian development sites sold in 2017 went to Chinese buyers.

Knight Frank said those transactions were collectively valued at more than $2 billion.

Chinese buyers were most attracted to Victoria, making up 38.7 per cent of residential development site sales in the state.

In New South Wales, 35.6 per cent of residential development sites were sold to Chinese in 2017, followed by 7.4 per cent in Queensland.

Knight Frank head of residential research Michelle Ciesielski said the share of sales to Chinese buyers in Australia had tripled since 2013 but had decreased from the 38 per cent recorded in 2016.

“Sustained developer interest in the Australian market has come in spite of government efforts in both Australia and China to tighten credit conditions as they relate to residential investment and development,” Ms Ciesielski said.

“In Australia, the Australian Prudential Regulatory Authority has encouraged local financial institutions to impose stricter controls, while in China the government has attempted to moderate capital outflow with China’s central bank imposing new rules for companies which make yuan-dominated loans to overseas entities.

“However, in mid-2017 this was relaxed somewhat, resulting in a boost to market confidence.”

Ms Ciesielski cautioned that inquiries from Chinese investors for Australian development sites were likely to moderate in 2018, with lengthier due diligence expected for those established in the market, and new transactions by developers reliant on the ability to transfer funds out of China.