Late last year, BetaShares’ chief economist, David Bassanese, questioned why Australia does not impose stricter limits on foreigners buying local homes:
Bassanese alluded to an article that stated:
Wealthy Chinese buyers are taking private jets to Melbourne to purchase mansions in Toorak – the city’s most expensive suburb – on the spot, says Toorak buyer’s agent Alex Bragilevsky”.
“Mr Bragilevsky… says 90% of the work he now does is for Chinese buyers”.
“I’ve facilitated $135 million of real estate deals [in Toorak] in the past six months”, he told The AFR. “All these buyers were Chinese”.
“The Chinese will pay over the odds for single dwellings”, he said.
Last month, The AFR posted about a Chinese FIRB-approved temporary migrant who outbid locals by $1 million for a Miami-style mansion in Mermaid Waters:
The conversation with a Gold Coast real estate agent was instructive, indicating that Chinese buyer demand has increased:
“This was a FIRB buyer [a non-permanent resident required to get Foreign Investment Review Board permission to buy a new home]”, the agent told The AFR.
“I have noticed in the last six months the influx of Chinese buyers at auctions and buying has been as high it was pre-COVID. They’re definitely getting access to cash and repatriating it to Australia”.
“They seem to be getting it out more easily than I originally thought. I thought it was lot more complicated. There are multiple cash buyers we’re seeing. I’m only talking about the luxury end of the market”, the agent said.
Overseas buyers are targeting more than just the premium market.
Recent data from real estate experts, Juwai IQI, PropTrack, and the Australian Treasury reveals an increase in global interest in Australian property, led by China.
According to NAB’s Residential Property Survey of real market insiders, the proportion of Australian houses sold to international buyers has increased dramatically since the country’s borders opened in late 2021.
Overseas searches on realestate.com.au, published by PropTrack, also revealed that international buyer interest in Australian homes was at an all-time high, driven by China:
Both surveys came after Juwai IQI, a property marketplace, named Australia the #1 destination for Chinese buyers.
Juwai spokesperson David Platter said the firm had “been working with a lot of Chinese ever since the borders opened. Presumably as flights continue to increase we will see buying increase”.
“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”.
Late last year, the Australian Treasury revealed that foreign buyer approvals jumped by 40% in the latest quarter compared to the previous year, with mainland Chinese and Hong Kong purchasers leading the way.
Finally, a recent map by The Visual Capitalist portraying the migration patterns of the world’s billionaires projected that Australia would receive the most millionaire migrants (+5,200), while China would experience the greatest loss (-13,500).
A significant share of these migrant millionaires from China will inevitably land in Australia.
Over the weekend, Domain lifted the lid on “Sydney’s run of ridiculously expensive secret sales” to Chinese buyers.
“Still with Sydney’s run of ridiculously expensive secret sales, the Killara home of oncologist Dr Sally Baron-Hay and Jamie Woodhill, of the Patrick stevedores founding family, has sold off-market for $15 million to little-known cash buyer Qiuqin Li”.
Anybody still denying that Chinese money is helping to drive up house prices only needs to look at the absurd prices of some homes selling in Sydney.
Check out the below record-breaking auction of a house on a 700sqm block in Strathfield, which sold to a Chinese buyer for $8.6 million:
Congratulations to the new buyers of this $8,610,000 home just a 30min stones throw inland from the Sydney CBD. The government eagerly awaits the $533k stamp duty check in the mail. pic.twitter.com/j2qVL7SJxK
— Reserve Bank of Property (@RBASHAGGER) April 20, 2024
Here’s the house:
Meanwhile, the head of private Chinese-Australian property development company Megland Group, Xia Meng and her partner Weixi Xie, paid $10.35 million for a waterfront house in Five Dock:
Who can blame them, given that Australia has the world’s weakest anti-money laundering regulations? We also permit temporary migrants to buy homes. And we are running the most aggressive immigration policy in our history.
As a result, Australian real estate is a magnet for global buyers, particularly wealthy Chinese.
Unfortunately, the Australian property market is no longer for Australians.
