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Chinese buyers are rapidly returning to the Australian property market after the end of Covid restrictions and better relations between the countries make it a better investment.
China’s economy grew just 3 percent in 2022, its slowest rate in nearly 40 years, prompting many of its citizens to seek investment opportunities abroad.
Chinese investment in Australia’s property market is expected to reach $4.8 billion in 2023, double the figure for 2022, according to Asian property technology group Juwai IQI.
This will mean more competition for local investors, but the increased number of buyers may help prop up falling property prices.
Chinese investment in Australia’s property market is expected to reach $4.8 billion by 2023. In the photo, a Chinese couple looks at a property.
Melbourne, Sydney, Brisbane, Perth and the Gold Coast will get the lion’s share of investment from both mainland China and Hong Kong.
After years of icy relations, including huge tariffs on Australian exports and a diplomatic spat over the origins of Covid-19, there has been a thaw since the Labor government was elected last May.
China recently resumed authorizing international travel and flight visas, ordering 50,000 Chinese students at Australian universities to return to face-to-face learning in Australia, mainly in Melbourne, Sydney and Brisbane.
“This will be the first opportunity for most Chinese to visit overseas real estate markets in three years,” Juwai chief executive Kashif Ansari said. saying Domain.
The company also said that Australia remains the preferred location for Chinese buyers, over the United States and Canada.
Peter Li of Sydney and Shanghai-based agency Plus said they have bookings to bring five or six groups of Chinese buyers for properties every day.
One agency said it has reserves to bring five or six groups of Chinese buyers to Australian properties every day.
He said that many are looking to occupy the houses and others are looking for investments.
“Buying off-plan apartments is particularly popular, as they can put down a deposit and then have time to move their money around,” Mr. Li said.
While most of the 50,000 arriving in Australia will be renting, many will have an apartment bought by their wealthy families.
“We found that Chinese students, who come from one-child families, like having their own apartment,” said Phil Honeywood of the Australian International Education Association.
The sudden influx of 50,000 Chinese students is expected to see rents in the central business districts of Sydney, Brisbane and Melbourne rise by around 5 per cent in the coming weeks.
Another important reason why Australia has become More appealing to Chinese investors is that China’s population fell by 850,000 last year, while Australia’s increased by 291,000.
A declining population means less demand for properties, while a growing population means more demand for new and existing properties.
There is no end in sight to China’s population decline: At 1.15 children per woman, it has one of the lowest birth rates in the world, but Australia’s population is projected to keep growing for decades to come.
This makes property investment in China less attractive to the younger generation, with more Chinese turning to the Australian market as a safe place to buy.
China’s population decline will have “increasingly significant repercussions” on its real estate market, as well as other aspects of its economy and society.
Those repercussions will have an impact abroad as well, said Joseph Chamie, a demographer and former director of the United Nations Population Division.
“As has been the case in many other countries around the world, the combination of demographic aging and population decline often translates into severely negative consequences for the real estate market,” Mr. Chamie told the South China Morning Mail.
Another reason Australian properties look good for Chinese investors is the way sales are structured in China, with most properties on a 70-year lease from the communist government.
In Hong Kong, most leases expire in 2047.
Those leases may or may not be renewed by the government, but that layer of insecurity makes Australia’s freehold rights look attractive to Chinese investors.
The sudden influx of 50,000 Chinese students is expected to see rents in the CBDs of Sydney, Brisbane and Melbourne rise by around 5 per cent in the coming weeks.
Whether the return of Chinese property investors will have a similar impact on home and unit sales prices remains to be seen.