Unrest drives Hong Kong buyers into arms of Australian vendors

Political and economic unrest is driving rising demand from Hong Kong buyers for the Australian property market.

Hong Kong’s unrest has buys seeking safer territory in Australia. Picture: AP

Political and economic unrest is driving rising demand from Hong Kong buyers for the Australian property market, in a move likened to the flood of investors seen following the 1997-98 Asian financial crisis.

Months of increasingly tense protests in the centre of Hong Kong alongside the escalating US-China trade war has driven concerns over the Chinese territory’s future.

With greater uncertainty, falling confidence in the market and looming recession, cashed-up residents are looking to secure their funds elsewhere, driving inquiry and transactions within the Australian property market.

Jon Ellis, chief executive and founder of foreign investor property marketplace Investorist, said Australia’s stable democracy and economy were the driving forces behind the inquiries.

“Historically, Hong Kong has been thought of as an extension of China in terms of investment … it’s always been a safe haven for money and that’s not going to change anytime soon,” Mr Ellis said.

“Our Hong Kong agents are very active because there is demand. It makes sense that money is flowing out of Hong Kong. Why wouldn’t it be?”

Last month, a luxurious Bellevue Hill property in Sydney’s east sold for $10m to Hong Kong investors who are believed to have secured the home in a two-day visit. In neighbouring Vaucluse, Sydney Sotheby’s agent Michael Pallier is marketing a $60m gated mansion. While a deal is yet to be reached, he confirmed there had been interest from Hong Kong parties.

Mr Pallier likened the demand to that seen in 1997. Hong Kong had only recently reverted to Chinese rule when it became one of the countries worst affected by the Asian financial crisis, leading to a six-year recession.

“We are going to see a repeat of 1997. It (Australia) is a good, safe investment,” Mr Pallier said.

“The dollar is low right now and democracy is stable. It’s a no-brainer. There is a lot of interest from Hong Kong right now.”

On the ground, Ray White Hong Kong chief executive James Li said the fact that many Hong Kong people sought citizenship in Australia in the 1980s and 1990s had made it easier for them to invest now.

“Australia is definitely one of the hottest destinations for Hong Kong people,” Mr Li said.

He said interest was also starting to bleed out of Sydney and Melbourne, with Brisbane and Adelaide real estate becoming increasing popular. The recent sale of apartments in a unit block in the Adelaide CBD drew 102 groups, or about 170 people, and led to seven sales in four days. A similar event for home-and-land deals in outer Melbourne the same weekend drew just 50 groups (100 people).

“These are the strongest traffic numbers we’ve ever had over five years of trading and we do these events every weekend,” Mr Li said.

Most Hong Kong investors are couples or young families. Most look to spend between $500,000 and $600,000.