(CLO) In the last financial year, Chinese people spent 2.6 billion AUD to buy 2,000 houses in Australia, continuing to lead the list of foreign investors and pushing real estate prices to record levels.
In the financial year ending in June, the Chinese continued to be the largest group of foreign investors in Australia's residential property market.
A neighbourhood in Sydney. Photo: EPA-EFE
Demand from mainland China for Australian property is surging, with investors eyeing higher-value homes, according to real estate agents.
Peter Li, general manager of Plus Agency in Sydney, said that based on trends over the first five days of the Lunar New Year, the number of Chinese home purchases this year will far exceed the same period last year. “During the holiday, the number of enquiries from mainland Chinese clients increased by 20 per cent,” he said. “In the past five days alone, we have received deposits for 12 properties in Sydney suburbs, all of which are larger properties.”
Plus Agency has an office in Shanghai, giving it better access to Chinese buyers, who are now interested in properties priced above AUD 1 million (about USD 627,000), higher than their previous average budget, according to Mr. Li.
“One of my clients is a wealthy mainland Chinese family who recently bought a $5 million, five-bedroom house in Chatswood, about 15 minutes from Sydney’s CBD,” Mr Li said. “They initially planned to spend $3.5 million on a semi-detached house, but then decided to invest in a more upmarket property.”
Why are Chinese people rushing to buy houses in Australia?
The main reason why Chinese people want to own property in Australia is cultural and family ties. According to the latest Australian government figures, the Chinese community, including those from Hong Kong, is the second largest immigrant group in the country. As of June 2022, about 600,000 people born in China were living in Australia, up 47% from a decade ago.
"Many families with distant relatives in Australia want to buy a house to live close to each other, especially in their retirement years," said Mr. Li.
Official figures show that in the financial year ending in June, mainland Chinese bought about 2,000 homes worth a total of A$2.6 billion, becoming the largest group of foreign investors in Australia.
Investors from Hong Kong came in second with 409 homes worth $400 million, while investors from Taiwan bought 395 homes worth the same amount. In the commercial property segment, mainland Chinese bought 200 properties worth $4.2 billion, ranking seventh on the list of foreign investors by transaction value.
In addition to family and cultural factors, Australia also attracts Chinese investors thanks to its favorable geographical location. "From Australia, you can easily travel to China without the big time difference like when going to the US or UK," said Mr. Li.
In addition, the Australian real estate market is also considered a "safe haven" for Chinese investors amid geopolitical tensions and economic concerns at home.
“Internationally, Australian property is seen as a safe haven investment amid global uncertainty,” said Ken Jacobs, a Sydney-based real estate agent. “We are seeing increased interest from buyers due to uncontrolled immigration in Europe, conflict in Ukraine, higher taxes in the UK and some uncertainty in the US following the recent election.”
Australian Property Market Outlook
The Reserve Bank of Australia (RBA) is expected to cut interest rates at its next meeting for the first time since 2020, further stimulating home buying demand.
According to Mr. Li, house prices in Australia have almost doubled in the past 10 years, reaching an average of 986,000 AUD in September last year, while rents are also at a record high. "Therefore, many investors believe that this is a reasonable time to buy," he said.
Sydney’s prime property values are expected to rise by around 6% this year, second only to Dubai’s 8-9.9% increase, according to Savills data. Sydney’s prime homes are set to see a 3.9% capital appreciation in 2024 alone.
"Sydney is forecast to continue to grow strongly, but this is mainly due to a shortage of supply rather than new supply," said Kelcie Sellers, director of global research at Savills. "A severe shortage of prime real estate will limit buying opportunities, which will continue to push prices up."
Sydney’s prime home prices are forecast to rise between 4% and 5.9% in 2025, supported by sustained demand from both domestic and international buyers, as well as support from a favourable exchange rate.
According to statistics from Ray White Group, in January alone, the average house price in Australia increased by 0.7% compared to the previous month and 5.9% compared to the same period last year.
However, some experts say the market may not maintain such strong growth momentum.
“House prices are unlikely to skyrocket in 2025, particularly in Australia’s east coast markets, as many buyers are reaching their maximum spending threshold after years of rising house prices,” said Jonathan Mayes, research director at Colliers.
Viet Ha (According to SCMP)
Source: https://www.congluan.vn/nguoi-trung-quoc-vung-tien-mua-bat-dong-san-dat-do-o-uc-post333940.html
Comment (0)