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Our Chinese neighbours are turning to Australian property investment

Asia’s wealthy population is increasingly turning to the Australian property market for investment opportunities, hoping to park their money in a more stable, long-term haven than what’s on offer closer to home.

Speaking to Property Observer, head of Melbourne based residential developer Pan Urban Mr Morry Schwartz, says Chinese buyers see our housing market as a more secure option than that of mainland China.

“In mainland China there is a strange political combination of capitalism in a socialist environment, not necessarily the most stable,” he says. “People, who have wealth – some of them great wealth – worry about nationalism.”

Traditionally, Australian investors tend to be fairly insular when it comes to buying property. They generally stick to what they know best and that’s the proven stability of housing in our own major capital cities.

However Asian property investors are quite comfortable looking at offshore opportunities in the likes of Australia and Canada, and often parents of overseas students who come here to attend university will buy an apartment for their offspring.

Schwartz’s comments are timely given the recent launch of the world’s largest international property search portal for Mandarin-speaking Chinese buyers, Juwai.com.

More than 80,000 developers and agents have a presence on the site, from countries including Australia, the US, Canada, the UK and Japan.

“Australian agents are looking for buyers, and Chinese buyers want to spend billions on Australian property. But getting the two groups together before Juwai cost a fortune,” says Schwartz.

“Agents had to travel to China for property expos, hire Mandarin-speaking staff or to split their commissions with Chinese agents — none of which is affordable in this marketplace.”

He says that local and offshore Asian buyers currently account for about 60 per cent of all enquiries and sales of Pan Urban projects, which represents a marked increase from a few years ago.

According to the Schwartz, Asian buyers have a preference for one and two bedroom apartments because they are more affordable and offer the urban and inner-city lifestyle they aspire to.

He says they also tend to buy in areas that already have a well-established Chinese community, such as Springvale and Doncaster.

Schwartz says Australian developers and agents are starting to embrace interest from Chinese investors and adds that they will need to continue welcoming our overseas neighbours as potential buyers in order to prosper in these slower market conditions.

“You are not doing a good job at selling real estate in Australia today if you’re not marketing to the Chinese buyer,” he says.

Of course for local property owners and investors, this is yet another fundamental that could help to underpin property values here.

With increased interest from overseas comes increased competition and at the end of the day, it’s this growing demand that impacts on the price of housing.

 

 



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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again 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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