One of the biggest ever ‘buy Australian’ campaigns is underway, and it’s happening in China, targetting the country’s growing middle class.
Farms, houses, apartments and vineyards – our finest Aussie assets are up for grabs.
At China’s International Luxury Property Show, Shanghai, Aussie property is in the spotlight and in hot demand.
Australian real estate agents on the ground are spruiking everything from budget price apartments to luxury waterfront mansions, and the Chinese buyers can’t get enough.
Melbourne real estate agent Chris Bevan from JP Dixon, is in China with a single purpose – to pitch a new apartment complex in Melbourne directly to Chinese buyers.
“It’s better buying at the moment as the market is down,” said Bevan.
He’s also hoping there’ll be interest in a $20 million beachfront mansion, complete with tennis court, pool gym and sauna.
“They love the security and they also love the more spacious living, and the more spacious lifestyle, because again here the apartments are quite small.”
Compared to Australia, Shanghai is packed and polluted. Home to 23 million people, the city’s property market is tightly controlled by the Government.
With rising interest rates, banks restricting lending, and only long leases on offer, it’s no wonder cashed up Chinese buyers don’t flinch at Aussie prices.
For the Chinese it’s a relatively inexpensive investment in a lifestyle. By comparison, a modest two bedroom apartment in downtown Shanghai would set you back around $3 million.
Realtor Susie Goodall has helped Chinese multimillionaires embark on a shopping spree for luxury homes in Canada.
“A lot of people from emerging markets are looking for safe havens for their money,” Goodall said.
“Both property markets are very strong. Both in Canada and in Australia education is also very good.”
Three weeks ago Vivienne Liu and her family moved to Australia from Shanghai. Now happily settling into their new $1.7 million home in Melbourne’s upmarket Kew, Liu says “the air is so fresh in Australia and the people are so friendly.”
A temporary resident on a business visa, Vivienne and her husband gained approval to buy through the Foreign Investment Review Board, which tightened its protocols only last year.
They dictate that foreigners can no longer buy existing Australian homes as investments. Temporary residents may buy one existing home to live in, but must apply first. Then they must sell their property when they leave Australia.
However all foreign investors can continue to buy new or off-the-plan properties without limitation, and there’s still a loophole – international students who become permanent residents can buy up big.
When it comes to our farms, Independent Senator Nick Xenephon says, “internationally Australia is a laughing stock,”
Senator Xenephon is pushing for our land sale threshold to be lowered to just $5 million.
“The fact is the current threshold before the umpire, the Foreign Investment Review Board is $231 million – any farm, any agricultural enterprise worth less that $231 million isn’t even looked at,” Senator Xenephon added.
NSW farmer Tim Duddy maintains agriculture is under siege. For instance over the past two years the world’s biggest coalminer, the Chinese Government owned Shenhua Watermark Coal, snapped up 43 farms for a total of $213 million on the Liverpool plains wheatbelt.
According to Duddy they make owners offers too good to refuse.
“The incentive that they’re throwing around, and have been paying, is almost up to ten times what some of that land is worth.”
But the biggest foreign raiders are actually the Americans, plunging over $39 billion into Australia, followed by the UK, China, Japan and Switzerland.
“Australia could be roughly worth just north of $8 trillion, half a trillion dollars of that comes from foreign direct investments, so without it there’d be literally hundreds of thousands of people without work,” said Australia’s Assistant Treasurer, Bill Shorten.
“In the twelve months to July it appears there was $220 billion of sales of Australian land. Within Australia it looks like the foreign proportion is somewhere around five to six per cent,” he added.
The fact is though, a quarter of the Northern Territory is either foreign owned or partially foreign owned, and now there’s even an Australian website showcasing farms direct to the Chinese.
“Where is this headed? This is not just about the current generation, it’s about our kids and our kid’s kids. We should be selling the milk, not the cow, the food, not the farm,” Senator Xenephon said.
With the Luxury Property Show whetting the appetite of Chinese investors, many are planning buying trips to Australia.
Bevan maintains that Chinese buyers are invaluable, helping sustain our property prices in uncertain times.
“The more people that come into the country, into Australia, the more jobs that are created, the more homes that are built – otherwise the market would be even flatter than it is at the moment,” he concluded.