Australian property top pick for Chinese buyers as foreign investment falls

Australian real estate is at the top of Chinese homebuyers’ wish lists agents report, as the latest figures show foreigners invested over $60bn in property in the December quarter.

Plus Agncey’s Fiona Yang said Chinese families are all moving to stay together. Picture: Tim Hunter.

Australian real estate has moved to the top of Chinese home buyer’s wishlists as borders reopen despite a slump in the levels of foreign investment into residential property through the December quarter.

New data released by federal Treasury showed foreigners invested $60.3bn into Australian property and industry on approved proposals through the December quarter of 2022.

While most industries recorded an increase, residential property investment halved from $2.9bn in the September quarter to $1.4bn by year’s end.

China proved the largest source of investment for residential real estate by both the value ($0.6 billion) and the number of proposals lodged. However, spending was down from $1bn compared to the previous three-month period.

Co-founder and group managing director of Chinese property portal Juwai IQI, Daniel Ho, said for the first time Australia is the most popular country for Chinese homebuyers, according to inquiry on the site since the start of last year.

“In January, Chinese buyer inquiries for Australian real estate surged by 24 per cent compared to December, due to the announcement that (Chinese) borders would be reopening,” he said.

The following most significant sources of residential investment were Hong Kong, Vietnam, Singapore, and the United Kingdom, each of which invested $100 million in residential real estate.

“At this rate, China will invest an estimated $3.2bn in Australian residential real estate this year, which would be up from $2.4bn in 2021-22. With the inclusion of Hong Kong, China would invest $3.8bn, which would be up from $3bn last year,” Mr Ho said.

Foreign buyers are ready to make quick decisions on Australian real estate, agents report.

Restrictions on foreign purchases mean international buyers are interested in off-the-plan and brand-new property, said executive partner at Plus Agency, Fiona Yang. The project marketing agency with offices in Sydney’s Chatswood and Shanghai has noticed a significant pick up in demand, selling 24 properties to Chinese buyers since the start of the year.

“We have five times more Chinese buyers than before, and they want to buy quickly,” Ms Yang said.

“The pandemic-related uncertainty is passed. The closed borders are open, rents are hot, and these buyers are fed up with three years of lockdown. They are committed to Australia. They are ready to make quick decisions on real estate.

“Satellite families have decided to stop splitting themselves between countries and are moving to Australia permanently. Before the pandemic, satellite families were widespread. One parent and the children would live in Australia. While the children went to school, the other parent would be back in China, working to pay the bills.”

Investment in commercial real estate, including office, industrial, and retail, rose $4.3bn to $19.3bn through the final quarter of 2022. Spend more than doubled on the previous quarter in the finance and insurance industry ($12.9bn), manufacturing, electricity and gas ($12.9bn) and agriculture, forestry and fishing ($4.4bn).

The only industry other than residential to decline was mineral exploration and development, down $4.3bn to $1.7bn.