Juwai.com’s 2018 Chinese Global Property Investment Report has revealed that Chinese buyers purchased $23.9 billion of Australian real estate in 2017. That consisted of $19.4 billion in residential and $4.5 billion in commercial acquisitions, and made Australia and New Zealand the biggest market for Chinese investment.
That figure is a drop of 26.8 per cent from the estimated spending in 2016 – $33 billion.
NZ received NZ$1.4 billion in investment. Combined, AU and NZ investment was down 23.2 per cent from 2016.
“Capital controls, restrictions on bank financing to offshore buyers, and new foreign buyer taxes and restrictions all served to reduce Chinese investment last year. This year we expect moderate growth, which is in line with Beijing’s goal of managed, rational overseas investment,” said Carrie Law, CEO and Director of Juwai.com.
“Despite the higher stamp duties, Chinese still see Australia as a long-term value. The majority of our residential buyers are purchasing for their own use, because they have children studying or working here, or because they plan to visit regularly or to retire here. Australia offers a stable environment, safety, quality educational institutions and the high quality of life. Both Sydney and Melbourne rank in the top five most livable cities in the world.”
Globally, the total Chinese investment in commercial and residential property hit US$119.7 billion, up 16.1 per cent from 2016.
“In the first half, the most popular Australian cities for Chinese buyers were Melbourne, Sydney, Brisbane, Adelaide, the Gold Coast, Canberra and Perth,” said Ms Law.
“The global picture for 2017 is one of plateauing investment in North America and Australasia accompanied by rapid growth in Asia. The bigger a number gets, generally the slower it grows. That’s one explanation for the lower growth rate in Chinese international property investment. The same level of growth off a larger starting point will give you a lower rate of growth,” she said.
Since 2010 Chinese investors have acquired international property valued in aggregate at more than US$430 billion.
“The amount of quality buyers keeps coming and accumulating, as there are only a certain amount of top end properties available. When our clients clarify their permanent residency status and become eligible to buy an established home, they go just as hard as your local buyers. We see there is a pattern of following the Australian school holidays, as more Chinese buyers adapt themselves to local lifestyle. They do the same planning for property hunting as local buyers,” said Jamie Mi, Partner and Head of International at Kay & Burton.
“We see Asian premium buyers getting younger and much more sophisticated than before. They have travelled the world to understand different architectural styles and start to appreciate period homes more. Their taste is not limited to new homes or land.
“There is also a trend of buying basic, then moving on to buying serious. There is also a trend of buying a big home first, then buying separate properties to suit the needs of different family members or children,” said Ms Mi.