Australia at top of list for China’s house hunters as borders prepare to reopen

China’s move to relax border restrictions could prove a boon for the property market in Australia, and improving ties between the two nations could only add to the demand.

Sydney-based real estate agent Monika Tu said improved relations between China and Australia could make the country more popular with Chinese property investors.

Australia is at the top of shopping lists for Chinese property hunters as the world’s second-largest economy moves to loosen travel restrictions from next month while dealing with a surge in Covid-19 cases.

While demand was not expected to return to levels seen at the end of last decade, Australia’s status as a safe destination, its growth potential and value for money compared to Shanghai made it ­attractive.

Black Diamondz director Monika Tu, who specialises in selling real estate to Chinese buyers including in Australia, and prior to Covid-19 would regularly visit China to meet with buyers, said signs of improved relations between Beijing and Canberra would only further the appeal of Australia.

“With the world so unsettled, right now is the best opportunity for us to market property in Australia with it considered a very safe place and a favourable investor environment even though it is expensive,” Ms Tu said.

“Improved relations between China and Australia will give wealthy buyers even more confidence to invest in our property market.”

Meanwhile, data from Chinese property portal Juwai IQI this month showed that Australia edged out the US and Canada as the most sought-after destination for China-based buyers. New Zealand was ranked 11th in popularity.

On Monday, Beijing announced that inbound travellers would no longer be required to go into quarantine from January 8. While there had been no road blocks on Chinese looking to leave the country, the quarantine on the return had suppressed the desire for many to leave.

It was the latest in a series of U-turn policies by Chinese officials whose Covid-zero policies had buckled under the pressure of a recent surge in cases.

Ms Tu said those in China with Australian visas such as significant investor visas would be the first to look with next month’s Chinese New Year – often a popular period for buyers to visit property – shaping as the first window.

“I’m fully booked out with clients in the run-up to Luna New Year and in late January and into February,” she said.

“We are planning to host a lot of events for them such as imitate dinners or harbour cruises showcasing what is on offer. We are also collaborating with luxury brands as our buyer demographic overlap,” Ms Tu said.

Foreign property investors are only permitted to purchase new properties and cannot buy established housing. They do not require a visa to acquire property, but are required to pay a vacancy fee if their dwelling is not occupied or rented out for more than six months a year.

The Foreign Investment Review Board’s September quarterly report published this month showed that China was the largest source country for residential real estate investment proposals by number and value ($1bn), as it was in 2021-22 and 2020-21. The next two sources of purchases were Hong Kong ($200m) and Vietnam ($100m).

Ray White chief economist Nerida Conisbee said off-the-plan apartment developers would be the big winner from China’s decision to relax its borders.

“I wouldn’t be surprised if they (property marketers) were already planning to make their way to China to drum up interest,” she said. “We are already seeing a lot of activity in commercial property from Chinese buyers and that should start to transfer over to residential property.”

Ms Conisbee said Sydney and Melbourne would the most sought-after cities, particularly in pockets that did not see much offshore demand during the pandemic and had a high volume of apartments and student populations.

“Chinese buyers are very educated and look very close at other markets such as Canberra and Brisbane that offer plenty of investment potential,” she said.

Juwai IQI co-founder and chief executive Kashif Ansari said Chinese international property investment was beginning to recover from pandemic lows, where purchases fell by up to 60 per cent.

“This will be the first opportunity in three years for most Chinese to visit overseas real estate markets,” he said.

“We expect Chinese outbound travel and accompanying property investment to increase ­rapidly in January from its ­current very low level,” Mr Ansari said.

CoreLogic’s latest home values index showed that housing prices are now down 7 per cent from the peak in April following the Reserve Bank’s hiking of the ­official cash rate from 0.1 per cent to 3.1 per cent in seven months.

Major banks are still predicting a 20 per cent plunge in home prices from their peaks, with Morgan Stanley expecting falls to continue until November 2023.