More than 11,000 “migrant millionaires” helped fuel growth in the booming property markets of Sydney and Melbourne last year, with high net-worth Chinese nationals now commuting in and out of the country to enjoy the Aussie lifestyle while continuing to work offshore.
Amid a tense national debate over housing affordability, Immigration Minister Peter Dutton is reviewing the impact of foreign property investment in the Australian market, with potential stamp duty surcharges being contemplated for all foreign property purchases.
Dutton is also considering a recommendation from the Productivity Commission to scrap the significant investor visa, which was designed to attract cashed-up foreign venture capitalists to Australia, but has since been criticised as a fast-track route to Australian residency.
There have been 1,746 such visas granted since the scheme was rolled out in 2012, attracting investments totaling $8.7bn. However, only 136 visas have been granted since the Coalition announced changes to the investment rules in mid-2015.
Real estate agents say Chinese property buyers are attracted to Australia’s clean air, water, and climate; as well as the country’s world-class healthcare and education systems. This has led to the emerging trend of Chinese migrants (often dual citizens) buying homes in the southeastern capitals while continuing to work offshore.
Foreign demand for Aussie property isn’t limited to the Chinese, as Australia has now emerged as the investment destination of choice for the global one percent. Various reports indicate that the number of ultra-high net-worth foreign individuals living in the country over the next decade will grow exponentially.
Malcolm Gunning, president of the Real Estate Institute of Australia (REIA), said high net-worth Chinese buyers favoured “prestige housing” in the two main capital cities, targeting homes worth up to $20m near select schools.
“It’s a little bit like the country kids that used to go to boarding school and travelled back to far western NSW,” Gunning told The Australian. “What we are seeing now is Sydney and Melbourne are absolutely global cities, great places to live … and so they will live in Australia and run a business in China — they are commuting.”
Matthew Meynell, head of investment services at Colliers International, said wealthy Chinese investors were attracted by the convenient flight routes between Australia and China. The Chinese were also drawn to Australia because of the country’s transparent legal and banking system, stable political environment, and great amenities and weather.
“If you look at mainland China, we are seeing a new middle class which now has aspirational goals ... their aspirational wealth goal is to live in a large freestanding home, with a grass backyard and a pool,” Meynell said. “Like the majority of the aspirational goals of all Australians, they are assimilating to our way of life.”
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