Over the weekend, The AFR reported that Chinese buyers are ramping up their purchases of Australian residential real estate:
The stimulus for Chinese demand was China’s decision to reopen its borders, which went into force in early January.
Experts believe that the Chinese government’s directive that foreign-enrolled students return to universities for face-to-face instruction will increase buyer demand even more.
China has also loosened rules that will allow funds to flow more freely into Australian property.
Dave Platter, spokesman for major Asia region property portal, Juwai IQI, told The AFR that “we have been working with a lot of Chinese ever since the borders opened”.
“Presumably as flights continue to increase we will see buying increase”.
Platter also said that the types of homes Chinese buyers are seeking has changed from inner-city apartments to larger, more expensive homes:
“Now it’s families who are buying [dwellings] to live in them. These people are upper middle-class and wealthy from a Chinese standpoint. They are buying townhouses, houses and large apartments at $1.5 million, $2 million, $2.5 million and up”.
According to the South China Morning Post (SCMP), Chinese immigration into Australia is poised to surpass pre-pandemic levels, enticed in part by the promise of buying Australian property:
“The top draws are real estate and renewable energy, said Stuart Orr, head of the business school at the Melbourne Institute of Technology”.
“In the global property market, Chinese have picked Australia as their top preference”.
“Third-quarter inquiries from China about Australia will be 76% higher than in the second quarter, and 35% higher than in the first quarter”.
“The first wave of buyers this year consisted of students who urgently needed to move to Australia to complete their studies in person”.
The SMH also recently reported that “cashed-up Chinese buyers have re-entered Sydney’s property market with gusto”.
While Victor Wu, managing director of a Melbourne-based real estate investment company, said “The enthusiasm of Chinese buyers to invest in the Australian housing market is undiminished”.
I explained on Sky News this week (video here) that the increase in foreign buying can be traced back to two primary causes:
- The boom in international students into Australia; and
- The former Rudd Government’s stupid decision in 2009 to allow temporary migrants to purchase existing homes.
Here is what I said on The Bolt Report:
“In 2008, the former Rudd government allowed temporary migrants to buy existing homes. And what we’re basically seeing is a massive influx in temporary migrants, which are mostly foreign students”.
“Surprise, surprise that’s leading to more purchases of established dwellings by foreign buyers”.
“At the very least, if the government’s not going to cut the immigration intake, they should at least ban temporary migrants from purchasing existing dwellings in Australia”.
“I always thought a temporary migrant was “temporary”. So, why are we allowing them to buy our established property? It just doesn’t make any sense”.
Regardless, the plight of Australians seeking housing is set to worsen amid record immigration and foreign buyer demand.
