Rising markets and a weakened Australian dollar are sparking a renewed interest from Chinese investors in the “affordable” Australian property market. Australian Investors may be forced to be proactive to beat the crowds.
- Depreciation of the AUD is offering Chinese investors an 11% discount on purchases compared to 2017 prices
- China’s Largest Overseas Property Website Juwai reports of those interviewed as many as 27% suggested they would consider purchasing an Australian property on their next trip
- Melbourne was the top picked city, with Brisbane gaining momentum thanks to it’s affordability
China’s largest overseas property website Juwai has released a recent report suggesting the returned interest of Chinese investors for Australian properties after a prolonged hiatus as prices started to slide back in 2017. According to the report, Chinese have put Australia as the top destination to visit and purchase a property with over 25% of potential tourists telling the Chinese website that they will investigate the potential of purchasing a property on the next Australian trip. With over a million Chinese visiting Australia annually that isn’t a small amount.
Melbourne is the number one pick with almost half of all Chinese interviewed suggested Melbourne was their top destination to purchase. Brisbane is making a sharp run for the number two spot with a large affordability advantage which could end up being good news for Brisbane property owners.
The renewed interest comes as a combination of the markets beginning to recover with both Sydney and Melbourne showing three consecutive positive months since June. the weekend Australian dollar is also providing large saving opportunities with the Chinese Yuan going 11% further than it did back in 2017 when we saw the last burst of Chinese buyers which had a large effect on the markets.
According to Jawai enquiries from Chinese investors, it’s the first time since 2016 that we have seen two consecutive quarters of growth with the first quarter of the year showing a 40% growth compared to the same period in 2018.
“Melbourne is the number one pick but Brisbane is offering some bargains”
The report states that the majority of enquiries are based on Melbourne property with many more enquiries from Melbourne than Sydney. 40% of buyers rated Melbourne as the number one pick with less than 25% chasing Sydney. The real shakeup, however, is Brisbane with more than 10% of the Chinese market showing a keen interest in Brisbane properties. This is certainly worth noting for Brisbane based investors given Brisbane currently has one of the biggest historical disparities in median house price between Brisbane and Melbourne in record.
The report suggests that Hobart, Brisbane and Canberra are the three cities being shown the most interest that wasn’t there back in the previous boom.
State By State Percentage of Enquiries
- MELBOURNE 43.8%
- SYDNEY 23.9%
- BRISBANE 10.1%
- ADELAIDE/ PERTH 6.1%
- GOLD COAST 3.7%
- CANBERRA 3.6%
- HOBART 2.6%
Bottomed out prices and a weakened Aussie dollar make it the perfect climate for Chinese buyers
It could certainly be a matter of act now for Australian investors or be frozen out again. The survey from July stated that the majority of Chinese investors would be looking to hold off at least until next year. Juwai stated a contributing factor was a relaxation of controls created to keep money within the nation.
Main motivators behind the renewed interest of Chinese Investors
- Reduction of China’s regime of financial control creating a large opportunity returning Chinese investment to Australian Residential real estate
- A reduction in foreign buyer tax in a number of Australian states is also a contributing factor
- And of course, Australian Property is potentially as cheap as we’re going to see it for quite some time
If you are considering getting in before it’s too late we may be able to assist. Please get in touch to speak with one of our State Managers about what options are open to you.
If you are interested in the August snapshot for Australia LOOK NO FURTHER