Chinese property investors buying up Australian real estate in big way

ABC News reports that with one billion serious savers and more than a million millionaires, a new generation of Chinese investors are making their presence felt in the Australian property market.

According to government figures, Chinese buyers poured $4 billion into the Australian real estate markets last year.

The trend is not surprising considering the rapid rate of expansion of the middle class.

According to the Organisation for Economic Cooperation and Development 135 million Chinese have now joined the middle class. By 2020, that number will grow to a staggering 540 million.

Many of them are also savvy investors who look to purchase properties close to the train station, prestigious schools and the CBD.

Generally, Chinese investors also like to buy in suburbs that are well known in the Chinese community.

A force to be reckoned with

Harry Triguboff, founder of the Meriton Group, was reported as saying that fifteen per cent of Meriton’s sales in 2012 were to offshore Chinese investors.

Mr Triguboff said:

“They’re not very concerned about the amount of return, they want to see capital gain, and I think that now with our dollar coming down… it will help us to sell even more.”

Mr Triguboff says the right to title is a major drawcard for Chinese investors, while many also purchase with their children in mind.

“They often come here to buy for their children because many of them study here so they would love to have an apartment so they would know where the child is going to stay. In fact, the purchases that we get usually have somebody in the family who went to school here or university.”

‘Perfect timing’ for Chinese buyers to look offshore

[sam id=37 codes=’true’]As policy makers in China bring in initiatives to curb speculative demand and stabilise property prices, an increasingly number of investors are looking offshore.

Beijing is bringing in a 20 per cent capital gains tax in selective cities as well as requiring a larger deposit from second home buyers.

A few weeks ago the then Prime Minister Julia Gillard welcomed the wave of new foreign investments. She was reported as saying:

“Chinese investment continues to play an important role in supporting Australia’s economic growth and property sector.

In 2011-12, the Australian government screened and approved almost 5,000 investment proposals from Chinese investors. These were worth around $16 billion, including over $4 billion in the real estate sector.”

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Michael is a director of Metropole Property Strategists who create wealth for their clients through independent, unbiased property advice and advocacy. He's been once agin been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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