Chinese Buyers Return to Resurgent Australian Property Market
(Bloomberg) -- Chinese buyers are once again snapping up property in Australia, further fueling resurgent prices in everything from luxury homes to tiny student apartments.
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Buyer inquiries from China for Australian properties soared 127% in the first three months of the year from the final quarter of 2022, according to data from real estate firm Juwai IQI. Real estate agents who work with Chinese buyers predict numbers will surge this year.
“We expect Chinese investment in Australian real estate to climb at least 30% in 2023 from 2022,” said Daniel Ho, co-founder of Juwai IQI, which helps sell foreign property to clients in Asia. “Chinese buyers are back, and more will come in the second half of the year than in the first.”
That outlook is likely to concern Australian policy makers who are already shocked at the speed of a housing recovery following 11 interest-rate increases in a year. Rising rents, limited supply and population growth are driving property markets from Sydney to Perth and a return of big-spending foreign buyers will add to pressure on prices.
Australia is the No.1 destination for Chinese buyers of offshore property — regaining its status following a hiatus when borders were shut for the pandemic and as relations between Beijing and Canberra steadily improve, according to Juwai IQI.
Foreign Investment Review Board data show China was the single largest source of offshore investment in Australian residential real estate in the fourth quarter of last year at A$600 million ($400 million).
Demand is strongest for three- and four-bedroom houses, said Peter Li, co-founder of Sydney-based Plus Agency which sells new projects, mainly to Chinese investors.
“We have a lot of Chinese people who are finally coming back to Australia and reuniting with their families,” Li said, referring to people separated during the pandemic. “They are looking to upgrade.”
He said Chinese first home buyers are “still not fully back into the market.”
Australia has long appealed to Chinese buyers as it’s in the same timezone and region as the mainland and has a reputation as a safe and environmentally clean destination.
Mounting tensions between Beijing and Canberra that included China introducing sanctions on some Australian commodities damped the ardor of mainland home buyers for a period. But that now seems to be in the rearview mirror, Juwai’s Ho said
Chinese demand is likely to strengthen further as more tourists and students travel to Australia in coming months, according to Diana Mousina, deputy chief economist at AMP Capital Markets.
Luxury housing is of particular interest to Chinese buyers. “The market is fantastic for high-end properties,” said Monika Tu, founder and director of Black Diamondz Group which works with Chinese home buyers who are looking to settle in Australia.
She is currently selling luxury apartments at Sydney’s harborside 6-star Crown Resort, where the price of a penthouse tops A$100 million.
“People still want to come to Australia, still want to invest here. Rising interest rates are not a problem, not for international buyers from China.”
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