Hong Kong tycoons’ interest in Australia’s top-end residential property market is expected to renew amid civil unrest against the mooted extradition bill.
“Buyers have rediscovered their appetite for Australian property because they want to get their money out of Hong Kong,” said CBRE residential senior director Ben Stewart.
CBRE flew its Hong Kong-based team out to Australia for a tour of residential investments across the eastern seaboard this week, arriving in Sydney on Thursday.
“The fact the Aussie dollar is at a 10-year low and investment in London has come off given the uncertainty over Brexit had already made Australian real estate look good, but the protests this week upped the ante even further,” Mr Stewart said.
Foreigner investment in Australian real estate has dropped substantially in recent years, down 67 per cent in the 2016-17 Foreign Investment Review Board Report from a peak of $72.4 billion in approvals the year earlier.
The drop-off in foreign investment had been blamed in large part on China’s crackdown on capital outflows in recent years and more recently introduced state government charges on foreign buyers and stricter lending limits by Australian institutions.
The proposed extradition bill with China, which would allow a person in Hong Kong to be extradited to mainland China to face trial under the Communist legal system, prompted two million people to march through the financial centre earlier this week as protesters called for the resignation of Beijing-backed chief executive Carrie Lam. Ms Lam has refused to step down, and also refused to formally withdraw the controversial bill.
Davey Hong, head of McGrath’s China’s Desk, and Ken Jacobs, of Christie’s International, have both received renewed buyer inquiry from Hong Kong, but are yet to see that translate into any sales.
“We have noticed an increase in inquiry from expat and Chinese buyers,” Mr Jacobs said. “However, the recently introduced 8 per cent surcharge on non-resident foreign and expat buyers is having a negative impact on their buying decision.”
The NSW government doubled the stamp duty surcharge to 8 per cent for foreign buyers in 2017 and the Victorian government raised its stamp duty surcharge on foreign buyers from 7 per cent in 2016 to 8 per cent this year.
Despite the tax, Melbourne agent Jamie Mi, of Kay & Burton, said inquiry levels were also up for Melbourne’s high-end housing, although it was too soon to show buyers have transacted.
“We are expecting a new wave of investment from Hong Kong and Hong Kong-based expats in that $5 million to $20 million range,” Ms Mi said.
“Hong Kong is usually an international stepping stone for investment out of mainland China to the rest of the world, so it is often Chinese buyers looking to move their funds from Hong Kong to other markets.”
Reuters reports that some Hong Kong tycoons have started moving their wealth offshore given concerns over Beijing’s ability to get their assets in Hong Kong, with Singapore the favoured alternative financial market destination.