Offshore Chinese swarm Aussie real estate as prices boom

Our booming property market has fallen back into the crosshairs of cashed-up property buyers in China, with a surge of buyer activity recorded in key suburbs not traditionally on their radar.

Sotheby’s agent Mary Lin is selling a Rushcutters Bay unit block that has drawn strong interest from offshore Chinese. Picture: Jonathan Ng

Cashed-up Chinese homebuyers and investors have been swarming back into Australia’s booming real ­estate market with this year’s inquiries from the Asian superpower already surpassing pre-Covid levels.

In fact, real estate inquiries from China-based buyers have climbed 51 per cent year-on-year and are expected to rise even further over the rest of 2021, a Juwai study showed

The Chinese-language property portal’s co-founder Georg Chmiel said China-based buyers were encouraged by the prospect of international borders reopening in the near future and there was a sense of urgency spurring their purchases.

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“Recent price increases have fuelled a fear of missing out,” he said. “Chinese buyers are really going after capital gains and long-term growth opportunities and many want to buy while interest rates are low and exchange rates are favourable.”

Mr Chmiel said part of recent demand was “catch up” from last year, when the economic shocks from Covid-19 drove Chinese inquiries on Aussie real estate down 19.2 per cent, but there was also a growing cohort of offshore buyers wanting family homes.

Mirvac development Pavillions in Olympic Park attracted the third highest inquiries from China-based buyers this year.

“For the first time, most people are purchasing for their own use. They want a lifestyle change,” Mr Chmiel said.

“One element that’s coming into play are the technology changes that make it possible to work from anywhere.

“Australia is an attractive place to live because of the stable political environment, strong economy and good education.”

Chinese buyers’ changing priorities were reflected in the top NSW locations for inquiries, which included a range of markets that have not traditionally attracted high numbers of Chinese buyers.

They included “lifestyle” markets such as Byron Bay, Vaucluse, Newcastle and Goulburn, according to the Juwai data.

In the past, Chinese buyers typically gravitated to suburbs with high rates of construction such as the Sydney CBD and Chatswood. This was due to Foreign Investment Review Board rules largely restricting international buyers to new home purchases.

Among the most popular listings for China-based buyers over the past year were acreages in the Southern Highlands, luxury homes in exclusive Harbour enclaves, townhouses in the Hills region and inner city units.

Mirvac head of residential Stuart Penkilis said Chinese buyers were typically seeking larger, family homes.

“We are currently seeing a big spike in inquiry on our major Sydney projects from offshore, driven by purchasers looking to immigrate in the coming years,” he said. “Increased inquiry may also be a sign Chinese families are anticipating a return to more open borders.”

This Wattle Ridge estate in the Southern Highlands, listed for $14m, was among the 10 most searched properties by Chinese buyers.

Sotheby’s Sydney director Michael Pallier said many of the buyers making inquiries on Australian properties from China once studied in the country and had permanent residency or citizenship.

“They were here for a while, went back to make their money, but kept that safety net of residency,” he said. “Australian property, especially in Sydney, is seen as a very safe place to put your money. In China, everything is leasehold.”

Black Diamondz director Monika Tu, who has built a business empire from selling luxury homes to wealthy Chinese, said she was getting offers of up to $40 million from Chinese buyers basing their purchases solely on video tours.

“A lot of wealthy Chinese really want to come here,” she said.

Sotheby’s sales associate Mary Lin said Chinese social media giant WeChat was a big source of inquiries. “Our buyers are often intergenerational. They want good homes.”