Chinese buyers are snapping up some of the best luxury properties in Sydney including big homes on the harbor, and new condominium developments.
Real estate brokers and developers said Chinese buyers are most interested in hot properties in the inner-city and by the beach. They are attracted by new foreign ownership rules, a favorable exchange rate, and the relative stability of the Australian property market.
After the UK and New Zealand, China is third in the lineup of countries that sends immigrants to Australia. Last financial year, more than 70,000 Chinese arrived in Australia to live permanently, including a steady stream of business migrants and a growing number of students.
"In many cases, Chinese immigrants to Australia are buying into key lifestyle markets, which are characterized as being close to the ocean or within the inner-city," said Tim Lawless, national research director at RP Data, a property and analytics information company.
In March, Chinese businessman Jiang Mei bought one of the most expensive houses ever sold in Sydney, an inner-city, Point Piper house for $32.4 million.
This set off a buying trend. Chinese buyers paid $14.5 million for a home at Rose Bay, and then a Shanghai couple bought in the same waterfront suburb for $15 million. Another Chinese couple bought a $5.8 million house, and a Chinese investor bought a smaller, second property for $1 million, with plans to rent out the home.
Raine and Horne, an Australian real estate agency that negotiated the Point Piper house deal, said interest from the Chinese mainland picked up by about 15 percent at the beginning of 2009.
In March, Australia's Foreign Investment Review Board (FIRB) introduced dramatic changes to rules governing foreign buyers, including that all apartments in new projects can be sold to foreigners. Previously, only half the apartments in a development could be sold to overseas buyers. Student visa holders who live in Australia are no longer limited to spending only $300,000 on a property.
Richard Lawrence, a partner with Holland & Knight's Beijing office, who often advises clients on China-related real estate projects, said Chinese buyers are becoming more active in foreign real estate, particularly those looking to diversify their portfolio.
In China, some people have concerns that a serious asset bubble is developing in real estate, so overseas markets are starting to look cheap by comparison.
"I think we will see Chinese corporate and institutional investors start to turn to real estate investment opportunities elsewhere," he said, noting that Australia and the US are key markets.
One real estate agent who deals with top-tier properties said more Chinese than ever are looking to buy in Sydney. Many Chinese want to migrate to Australia, either because their children attend school there, they are considering retiring, or they want to buy investment property.
Wendy Searle, a spokeswoman for Di Jones real estate, said most Chinese are discreet buyers.
"You only get to know they have purchased by looking at completion records, available after a sale," she said. "It is said in some circles that a majority of houses with the best Sydney harbor views will be owned by Chinese people in a few years."
She cited a list of the top 100 house sales in Australia for 2008. "A lot of the names of the buyers were Chinese," she said.
Australia's real estate market has proved to be very resilient in comparison with other Western markets. Housing prices fell by just 3.8 percent during the 2008 downturn and have since recovered during the first half of 2009.
(China Daily August 22, 2009)
