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Andrew Taylor, Chinese Momentum Shifting


Andrew Taylor

By ANDREW TAYLOR, co-CEO of Juwai.com, the No.8 Chinese property portal in Australia and 53 other countries. If you have been anywhere near an auction or open for inspection this past year, you know that Chinese buyers are a rapidly growing trend. You might be surprised, however, by what’s really happening with this group of international buyers.

Here’s what most people already know: The Foreign Investment Review Board reports that Chinese are buying more property in Australia than ever before. These buyers, according to research from the US, pay cash 70% of the time. And they tend to spend more, believes Citigroup, than other buyers. Now, here’s what’s new: user data from Juwai.com show that Chinese buyers are starting to buy in new suburbs. They are now looking at neighbourhoods they wouldn’t have considered just 12 months ago. The traditional gateway cities for Chinese buyers are Sydney, the Gold Coast, Brisbane and Melbourne. These are still the most popular destinations for Chinese buyers. Overall, the momentum is shifting from the traditional leaders to a new batch of cities. Only one of the most popular cities with Chinese buyers also has the fastest growing interest by this group. Sydney is an example. It gets the most Chinese investor interest of any city in Australia. Yet, Chinese buyer interest is growing much faster in many other cities. The same is true of Brisbane. And it’s also true of the Gold Coast. These cities are among the most popular for Chinese buyers. But, Chinese interest is no longer growing as quickly in them as in other places. Don’t misunderstand me. The traditional gateway cities still receive the largest share of Chinese investor money. And that is a lot of money, indeed. Our estimate is that Chinese invested $5.4 billion in Australian real estate last year. As more and more Chinese investment comes into Australia, a transfer of wealth takes place. The money that arrives in a Chinese wallet ends up in Australian pockets. What’s surprising here is the growth trend. The list of cities growing most quickly in popularity with Chinese investors includes names like Perth, Darwin, Mandurah and Geelong. This increased interest in a new group of destinations is a sign that Chinese investors are seeking better price and yields. The traditional gateway cities are relatively expensive. Asking prices in Sydney alone are up 12% over the past year, according to SQM Research. Chinese buyers are also shifting to new cities because they feel more comfortable in Australia. They understand the country better. They don’t feel obliged to do what’s always been done.


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Andrew Taylor