If you think Chinese property investors are all buying the established homes here in Australia, think again. Not only is the FIRB limiting Chinese investors (especially those from China) buying established properties in Australia, Chinese investors themselves aren’t that interested too – they are more interested in developing their own land, right here, right now, in Australia.
In the past 24-36 months, Chinese investors in both Australia and China have spent at least $7.5 billion Australian Dollars on new residential development sites.
That’s more than $10 million AUD per DAY.
“Asian buyers are “vital” to the success of future residential developments and developers must engage with them,” says Morry Schwartz, head of Melbourne-based property developer Pan Urban.
“Chinese government is restricting Chinese investors from buying investment properties back in mainland China,” says Michael Yang, Chief Executive of OurProperties.com.au and GiFang.com, “yes you can buy your principal place of residence, but buying an investment property? Forget it, banks won’t lend you the money, and you need more than 60% to pay the deposit.”
“Even if you can buy a property back in China, it will be a leasehold for 70 years,” he added.
So maybe Australia’s property is more attractive because buyers own it forever (or 9999 years)? You’d think so.
During our day-to-day conversation with Australian agents and developers, they seem to be also finding wealthy Chinese buyers worry about the stability of the property market at home in mainland China. They remain keen on cities like Sydney, Melbourne, Brisbane where their children can attend good schools and universities for better education.
“Chinese parents are the BEST in the world,” says Rachel Zhang, Director of Property Investment from GiFang.com, who manages a team that only handles $5 million plus investors on daily basis, “they create the BEST condition for their children – property-wise, life-wise, wealth-wise.”
Being the head of Pan Urban, “taken as a group, local and offshore Asian buyers currently account for about 60% of enquiries and purchases at Pan Urban’s developments” – “up substantially from a few years ago,” Schwartz says.
Schwartz says one- and two-bedroom apartments appeal to Asian buyers who are generally looking for rental returns, because they are more affordable.
“They like urban and inner-city apartments and also buy in areas such as Doncaster and Springvale where local Chinese communities are based,” he says. And Australian developers and agents are gaining a stronger understanding of the Chinese markets.
“The Chinese investors with REAL cash are also buying in suburbs such as Toorak, Brighton, Sandringham, Canterbury and other suburbs known for luxury properties,” says Michael, “and we have created a specific section on our Chinese and English websites that specifically caters for property seekers seeking this type of properties - luxury properties.”
“And this is why, given our hosted and co-hosted property events in China in 2011 had been very fruitful, this year we will be doing a lot more, but in a much more organised and result-driven way, engaging with local agents that will deliver, not just anyone.”
“There is a moving together from two directions. You are not doing a good job at selling real estate in Australia today if you’re not marketing to the Chinese buyer,” he believes.
For more information on selling properties to Chinese buyers, property events in China, real estate property road shows in China, organising of Chinese investors’ trips to Australia, please contact us.