Chinese buyers will likely continue to account for the largest share of all foreign buyer purchases in Australia this year, according to a report by Juwai.com.
Victoria is set to remain the number-one recipient of Chinese residential investment, both by offshore and local Chinese buyers. Data from the Foreign Investment Review Board showed that the state 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.
“Melbourne retains clear advantages over Sydney in terms of lifestyle, prices, and also a foreign buyer stamp duty that at 7% is one point lower than the New South Wales equivalent,” Juwai.com CEO and Director Carrie Law said.
Consequently, Sydney is forecasted to hold on to the second spot this year. Chinese purchasers consider the city iconic. Very few attractions in Melbourne have earned the same level of awareness among Chinese consumers as have Sydney stand-outs such as Sydney Harbour, Harbour Bridge, the Opera House, and Bondi Beach. More than half (62%) of Chinese tourists visit Sydney, while only 50% go to Melbourne.
Brisbane will also benefit from Chinese buying, thanks to families whose children are studying in the city, and who want to house them in a property that they own. Over 33,000 mainland and Hong Kong and mainland Chinese students were studying in Queensland the past year– up from about 21,000 in 2015, marking a 57% rise in four years.
“Many of the buyers we work with hope to defray or actually make a profit on their student housing costs. They buy a residence and rent out an extra bedroom to another student as a roommate. If the combination of that income and possible capital gains is high enough, the student could complete his or her studies having paid a net of zero for their housing,” said Law.
Chinese buyers are likely to continue to prioritise new apartments and house-and-land packages when looking at all four cities. Notably, buyers are being pulled away from more traditional inner-city locations, and they turn instead to outer suburbs where new estates are rising.
“Where developers or third parties can provide financing, demand is likely to follow,” said Law.
