Chinese Property Buyers tipped to replace Chinese Investors in Australia

Chinese property Buyers tipped to Replace Chinese Investors in Australian homes, isn’t it one and the same thing?

Having invested in an apartment, they gained a ‘Permanent Resident’ Visa which has allowed them the freedom to come … to stay or go.

Real estate agents and analysts say enquiries and sales are on the rise from Chinese and other foreign buyers. 

Despite the supply of homes not meeting the current demand and needs of Australians, why is the Morrison Government allowing overseas competition for our homes?

The property sector is no doubt loving this …

Prior to the Pandemic foreign buyers particularly from China were able to take advantage of a range of temporary visas that invited investment in our real estate to gain Permanent Residency.

They were able to buy an apartment online through, for example, Juwai, and gain a ‘Permanent Resident Visa’ which has enabled them to buy our detached homes and avoid the ‘investor taxes’!  During the Pandemic we have learnt that real estate agents have had Chinese buyers on the phone or online seeking and buying up our homes sight unseen!

In the late 1990s the Howard Government introduced the changes to our immigration policy for the Chinese middle class to embrace the offer of “flexible citizenship” in return for investing in property and education … this led to home prices rising in the early 2000s and the 2004 housing price boom.

How humongous is the amount of real estate owned by foreign buyers? Do they – meaning the Australian Government – know the level of assets in foreign ownership?

There is now a ‘Register of Foreign Ownership of Australian Assets’ … but is it retrospective?

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AND … Australia now has the ‘Foreign Investment Reform (Protecting Australia’s National Security) Act 2020 (Cth) …  amended the Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA) to (among other things) give the Treasurer powers to address new and emerging national security risks.

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Oh, good, but what of the security of home ownership for the Australian people not only being confronted by huge price hikes during 2021 which were said to be a consequence of very low interest rates, a housing supply shortage but …

SQM research managing director Louis Christopher said it had been an “extraordinarily” strong quarter.

“It was … driven by a multitude of factors, particularly government stimulus,” he said.

As with the First Home Buyer Grants which led to house price increases!  It seems that once again such offers benefit the property sector, and NSW Government stamp duty coffers.

“This has been the most rapid acceleration of house prices over a single quarter since Domain records began in 1993.” (reported 29 April 2021)

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So with the government spin particularly in NSW until now and the Delta strain of Covid-19 … its much-lauded contact tracing system that we had *controlled the Pandemic, was this perhaps to entice more overseas buyers to buy up our large homes and land creating even more competition for this limited housing stock?

And as the Real Estate Gatekeepers are exempt from the second tranche of the Anti-Money Laundering Laws (Morrison Government October 2018) it looks like Australians will readily be outbid again!  

Some homes may not even appear advertised on the real estate websites

It is now mooted that ‘Australian property is likely to be a more attractive option for overseas buyers’ but what is not conveyed is that they can buy online to gain the PR Visa to fly in when the borders reopen.

The peak of Chinese investment of almost $32Bn was in 2015-16 which led to a house price rise with suburban homes selling for $1.5M which happened to coincide with a visa and $1.5M investment.

Monika Tufounder and director of Black Diamondz Property whose clients are mainly Chinese citizens with Australian residency working and living abroad predicts that when the borders open they will flood back in … some are seeking $10M plus homes, but will they be seeking our detached homes with large land lots in green suburbs too? Hm … . Not only will they continue to come from China but Singapore, Hong Kong, the United States (Canada too?) and the United Kingdom. 27 of the 29 Sydney properties listed by Black Diamondz sold recently.

Once again the ‘exchange rate’ is in their favour!  With Australian housing more reasonably priced than Japan, London, New York, Beijing and Shanghai!

These $20 – $30M buyers having made their offers are holding off to exchange when they can return to see the property.

The pattern is repeated in Melbourne’s eastern suburb of Box Hill, where sales and marketing director, CBD Development, Ricky Chen is seeing enquiries pick up again for a mixed-use high-rise development with hotels and retail space. They are seeking larger apartments to live in, to retire in Australia or to send their children to study.

Martin North, principal of property research firm Digital Finance Analytics, also notes ‘there’s been a swing away from foreigners looking to invest to people wanting to move here.’  And that they are more interested in buying land and larger properties!

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And as CAAN has previously shared with you they are accompanied by parents, grandparents, guardians or a group of people buying together … in some suburban apartment developments for instance in Asquith they buy a whole floor!

There are a range of Visas facilitating this including Parent, Grandparent, Family, Student, PhD Student, Guardian …

This time Martin North predicts more competition for standalone houses, the top end of the market and large properties with land.

WHAT A FRIGHTENING PROSPECT … the competition for homes this year has been staggering with 100 or more people lining up for Open Home Inspections … Auctions held within two or three weeks … or Pre/Off Market Sales where buyers on one inspection have to make an offer or miss out!



HOW is this government on your side?