Melbourne is set to be the top location for Chinese buyers’ bargain-hunting in the Australian property market this year, according to a report by news.com.au.
Chinese investors’ goal to snap up properties in the country is driven by their currently growing wealth and the “desire to get a bargain while the market is soft,” said international property website Juwai.com.
A lack of property investment opportunities in China, a likely transfer of investment from the US to Australia because of the trade war, and the weakening of the yuan were also identified as reasons behind the move.
Despite Chinese buyers’ interest in Australian properties, actual buying activity has declined and is projected to remain flat in 2019.
While residential buying inquiries on Juwai.com rebounded in the last three months of 2018 and were able to surpass December 2017 quarter figures by 58.1%, inquiries dropped 20% at one point in 2018 when compared to the previous year.
This kind of demand is forecasted to be carried into this year, should there be no major economic or policy alterations.
Purchases by Chinese buyers in Australia are being impeded by foreign buyer taxes, difficulties in securing finance and capital controls from China, according to Juwai.com Chief Executive Carrie Law.
“A substantial change in any of these areas could lead to a corresponding increase in buyer activity,” she said.
Juwai.com anticipates Chinese buyers to still hold the top spot in the list of Australia’s foreign buyers, with Melbourne being the most in-demand location for them.
“According to Foreign Investment Review Board data, (Victoria) receives about $4 of foreign real estate investment for every $3 that goes to New South Wales and for every $2 that go to Queensland,” Law said.
Melbourne was reported to have evident advantages in terms of lifestyle, prices, and a foreign buyer stamp duty that, at 7%, is one point lower than the New South Wales equivalent.
Juwai.com has initially named the CBD, Point Cook, Doncaster, Southbank and Toorak as the most popular Melbourne suburbs among its users.
Geelong was also among the regional cities that Chinese buyers preferred in terms of housing.
