2017 saw Chinese buyers investing $23.9 billion in Australian real estate

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According to several reports, Chinese buyers purchased $23.9 billion of Australian real estate in 2017. That comprised $19.4 billion in residential and $4.5 billion in commercial acquisitions. In fact, thanks to this, Australia and New Zealand emerged to be the biggest market for Chinese investment. That figure is a drop of 26.8% from the estimated spending in 2016- $33 billion.

New Zealand received NZ$1.4 billion in investment. Combined, AU and NZ investment witnessed a fall of 23.2% from 2016. Expert opinion asserts that the reduction of Chinese investment last year can be attributed to various factors including capital controls, restrictions on bank financing to offshore buyers, as well as new foreign buyer taxes and restrictions. This year, moderate growth is expected, which will be in sync with Beijing’s goal of managed, rational overseas investment.

It is also interesting to note that despite the higher stamp duties, Chinese still look up to Australia as a long-term value. A major percentage of residential buyers are purchasing for their own use, in many cases because their children are working or studying here, or maybe because they intend to visit regularly or to retire there. Australia offers a stable environment, safety, quality educational institutions, as well as great lifestyle. Factually speaking, both Sydney and Melbourne feature in the top five most liveable cities in the world.

At a global scale, the total Chinese investment in commercial and residential property hit US$119.7 billion, up 16.1% from 2016. As far as the global picture of 2017 is concerned, it is one of plateauing investment in North America and Australasia accompanied by fast growth in Asia. The general thumb rule is, the bigger a number gets, the slower it grows. This also explains the lower growth rate Chinese international property investment. Since 2010, Chinese investors have acquired international property valued in aggregate at more than US$430 billion.

It has also been revealed that quality buyers keep coming in large numbers, since there are limited top end properties available. A pattern is generally observed that follows the Australian school holidays, as more Chinese buyers adapt themselves to local lifestyle. They also plan as extensively and elaborately for property hunting as local buyers. In recent times, Australian premium buyers are getting younger and much more sophisticated. They are extremely well-travelled, which makes them capable of understanding different architectural styles and appreciating period homes more. In fact, their taste is no longer confined to new homes or land.

Another trend which is being observed is that of buying basic, then moving on to buying serious. There is also a trend of buying a big home first, then buying separate properties to cater to the requirements of different family members or children.

Resident Editor