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Chinese Investment in Australian Real Estate in 2017


Chinese Investment in Australian Real Estate in 2017

 Is this the right time to sell property in Australia online? The big debate in Australia is over Chinese property buyers and how they are investing in a big way in the Australian property market, especially in cities such as Sydney and Melbourne, and to an extent in Brisbane and Perth.

Chinese investors are expected to buy properties worth $104.5 billion in the overseas property market. 20 percent of this will be invested in Australia. That is big news, but actually the figures for 2017 will be lower than that in 2016. In 2016, Chinese investors purchased properties worth $133.7 billion spent last year.

Australia has been the recipient of the second highest share of Chinese investment, not far behind the USA. A report on the Chinese real estate portal Juwai.com said, “With its proximity and deep commercial ties to China, appealing investment markets and a world-leading 26 years without a recession, Australia appeals to Chinese investors, immigrants and students. Chinese investment has been one of the most significant enablers of Australia’s recent residential property-building boom.”

Sue Jong, chief of operations at Juwai.com says that Chinese investment in Australia has actually decreased since 2015. In 2017, Chinese buyers are expected to buy properties worth $18.4 billion in Australian, compared to $23.8 billion in 2015-16.

Ms Jong said in an interview with The Herald Sun, “Current trends suggest Chinese property investment this year will be on par with the levels of 2015.”

She added that Chinese investors preferred Melbourne to Sydney: “It has lower prices (than Sydney), more new apartment projects and house and land estates, good schools and universities, a good economy and an appealing city lifestyle.”

There are indeed challenges for those who want to buy property in Australia quickly. The biggest irritant recently has been the frequent changes made by the government on regulations related to overseas investment.

The government wants to respond to complaints from ordinary Australians that foreign investors are getting all the best properties for sale in Australia, and have priced out the locals from the property market, especially in Sydney and Melbourne.

Victorian developer Tim Gurner accuses the Australian government of “killing the golden goose” by driving away Chinese investors.  He says that there has been a noticeable shortfall of 40% in the number of inquiries from Chinese for homes and apartments in Australia.

 Mr Gurner said in an interview with The Australian, “The reason why the Chinese come here is for consistency, a regulatory and political system that is meant to be orderly and easy to understand.

“The constant changes are a major issue. We have this golden goose and if we want to keep it and let our economies thrive from it then we can, or we can kill it by increasing taxes every day and changing regulation,” he added.

This point was emphasised by Urbis associate director Paul Riga, who says that frequent regulatory changes in Australia were hurting the property market. “Australia is seen as a safe haven, but there is a threshold and the more red tape and regulation, cost and expenses, they will have an impact on a portion of those buyers,” Mr Riga said.




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