The group of wealthy overseas buyers snatching houses out from underneath Aussies

Chinese interest in Australian properties continues to grow, with wealthy buyers snapping up homes worth $4 million in the country’s poshest areas.

Property group Juwai IQI has revealed that wealthy Chinese buyers with permanent residency in Australia were particularly interested in luxury homes and regularly traveled abroad for work.

Wealthy Chinese businessmen are now locked in a bidding war for expensive homes on Sydney’s north shore, including brand new properties in sub-divided blocks that local buyers were not particularly interested in.

Daniel Ho, the group’s director, said the top seven percent of buyers from China who inquired with his company were interested in Australian properties worth about $4.5 million.

This would be the average house price in Coogee, in Sydney’s south-east, or Castlecrag on the lower north coast.

“We call them ‘frequent flyer buyers’ because it seems like they spend as much time on planes as they do in China or Australia,” he said.

“These are buyers from China who are Australian residents and regularly travel back and forth for business and family commitments.

“They are wealthy and want to raise their families in Australia and look for homes that cost $4 million or more.”

The number of buyer inquiries from potential Chinese customers increased by 10 percent by 2024.

Thomas Ma, the CEO and co-founder of Fang.com.au, said monthly inquiries for homes on Sydney’s North Shore have increased by 450 per cent since 2021, with local Chinese buyers particularly interested in homes near schools .

“The North Coast is attractive because there is a range of great public and private school options and house prices are still attainable compared to the eastern suburbs,” he said.

Peter Li, the managing director of the Plus Agency which sells Australian property to Chinese buyers, said he had sold two expensive homes on Sydney’s north shore in the past week.

“Both buyers have Australian residency and frequently travel back and forth on business,” he said.

“Australia and China are both home to them, and their children are growing up here.

“Both are in the process of upgrading homes they already own in Chatswood.”

The Plus Agency sold a home in Lindfield on Sydney’s North Shore for $5.6 million to a Chinese businessman this month – with fierce bidding on a six-bedroom, four-bathroom home.

The high price was achieved despite the house being on a ‘hatchet block’; located behind another house with private driveway access to the street.

The potential buyer continued to increase his offer after the seller rejected his original offer of $5.2 million, made after a single brief viewing.

“He viewed the property for an hour, made an offer of $5.2 million on the spot and signed a contract,” Mr Li said.

“The seller rejected it, so he made another offer for $5.50888 million, which the seller also rejected.

“He then made a final offer of $5.55 million, which the seller accepted.”

But after it sold, another Chinese buyer trumped that with a bid of $5.6 million.

“This offer came from the wife of a Chinese couple who is looking for a house while her husband is in China for work,” Mr Li said.

Mr Li said Chinese buyers were more interested in homes in sub-divided blocks than Australians, who value spacious gardens and outdoor spaces more when paying that kind of money.

“This house is at the back of a long hatchet block, which not everyone likes,” he said.

“They have been unable to sell it because local demand for this type of property is weaker than international demand from buyers.”

A developer had bought an original house on Highfield Avenue in Lindfield for $5.926 million in August 2021, when Reserve Bank interest rates were at a record low 0.1 per cent.

The block was then divided in two, creating a brand new house and an existing house, each now worth a similar amount to the original, undivided property.

The Plus Agency also sold a six-bedroom house in Chatswood this month for $6.808888 million – or more than triple the $2.150 million it sold for in May 2018.

“This house had competing buyers – both Chinese international business people with Australian residency and those already living in the area, if not overseas,” Mr Li said.

“Chinese buyers love the north coast because Chatswood has the largest Chinese community in Sydney.

“I believe the majority are mainlanders now. Ten years ago, people from Hong Kong were the most numerous, but now there are more mainlanders.

“Lindfield has larger lots, but is still close to Chatswood.”

The buyers of both houses had deliberately offered prices with multiple ‘eights’ – because the number in Chinese also sounds like the words ‘get rich’.

Foreigners can purchase an established property in Australia if they have permanent residency or are studying.

But foreigners who don’t live in Australia are only allowed to buy something that’s brand new.

Permanent residents are treated differently from foreigners and do not require Foreign Investment Review Board approval to purchase a new or established property or plot of land.