China‘s biggest overseas property sales company expects Australia will become an even more attractive market for investors as coronavirus restrictions are eased.
With Australia’s property market facing a new downturn because of COVID-19, he said Prime Minister Scott Morrison‘s success in containing an outbreak was a strong selling point for real estate.
‘Australia was already appealing as a safe country where your investments are protected,’ he said.
‘Now, the country seems to have managed the pandemic well.
‘That makes it even more appealing to foreign buyers.’
During the past decade, China has been Australia’s biggest source of foreign real estate investment, even if there was a recent slump.
Juwai IQI, China’s biggest overseas property sales company expects Australia will become an even more attractive market for investors as coronavirus restrictions are eased. Chairman Georg Chmiel said investors liked apartments near universities. Pictured is a Top Ryde development in Sydney’s north near Macquarie University
Juwai’s praise for Australia also contradicts a threat from China’s ambassador to Australia.
Last month, Cheng Jingye threatened Chinese consumers would boycott Australian goods and services, over Mr Morrison’s call for an independent inquiry into the causes of COVID-19.
Mr Chmiel suggested Australia’s relatively low coronavirus death rate and case numbers, compared with the United States and the UK, would in fact encourage the Chinese to send their children to Australia to study – further boosting property.
‘Marketers in China are already using Australia’s good performance to persuade parents of children who have been studying in the US and the UK to look at Australia instead,’ he said.
Melbourne is regarded as the most popular city in Australia for Asian buyers, followed by Sydney and Brisbane, with Australia regarded as a stable place to invest money.
Mr Chmiel said Chinese buyers particularly liked places close to schools and universities that weren’t particularly expensive by Australian capital city standards.
Juwai has suggested Australia’s relatively low coronavirus death rate and case numbers, compared with the United States and the UK, would in fact encourage the Chinese to send their children to Australia to study – further boosting property. Pictured is a young woman having her temperature taken outside Apple’s Bondi Junction store in Sydney’s east
‘In general, Chinese buyers like the ease that comes with newly constructed units or houses,’ he said.
CORONAVIRUS CASES IN AUSTRALIA: 6,980
New South Wales: 3,059
Western Australia: 553
South Australia: 439
Australian Capital Territory: 107
Northern Territory: 29
TOTAL CASES: 6,980
‘They prefer homes near good schools and universities and convenient to services, transit and shopping.
‘At least three-quarters of Chinese buyers are looking for property valued less than $1million, and the median enquiry price comes in quite low, at around $610,000.’
In the year to June 30, 2019, new real estate investment in Australia from mainland China fell by almost 50 per cent, dropping by $6.1billion to a seven-year low, as the Chinese Communist Party government restricted outflows of capital, Australia’s Foreign Investment Review Board revealed on Thursday.
FIRB’s annual report showed the value of Chinese investment approvals across all sectors fell from $23.7 billion in 2017/18 to $13.1 billion in 2018/19.
Juwai dismissed the FIRB data as old, adding enquiries from Chinese buyers had doubled in April, compared with earlier months in 2020, and were 50 per cent higher compared with late 2019.
‘The tide may have turned because Chinese buyers seem to be coming back since the second half of last year,’ Mr Chmiel said.
Georg Chmiel, who chairs Juwai IQI, said Australia was regarded as a safe place to invest. Pictured is a man looking at screens at the Australia Securities Exchange in Sydney
Juwai said Chinese investors liked homes near good schools and universities and close to transport for less than $1million. Pictured is the University of New South Wales’s Kensington campus in Sydney’s south-east
In the decade to 2019, Chinese interests invested $113.2billion, more than double the United States’s $53.4billion, giving it a 19 per cent share.
The reversing in May of open home inspection bans, introduced on March 24, was also expected to bring Chinese investors back into the property market.
‘Now, the Australian market is beginning to open up slowly,’ Mr Chmiel said.
‘That’s a positive development that will make marketing and closing sales progressively easier.’
Mr Chmiel said Australian bank restrictions on lending to Chinese investors would be overcome, as they instead sought financing from non-bank lenders.
Juwai’s praise for Australia also contradicts a threat from China’s ambassador to Australia. Last month, Cheng Jingye threatened Chinese consumers would boycott Australian goods and services, over Mr Morrison’s call for an independent inquiry into the causes of COVID-19
Australia’s state stamp duties were also considered to be much cheaper than the equivalent property transfer taxes in Canada and Singapore.
How COVID-19 has affected house prices
Melbourne: DOWN 0.4 per cent to $818,806
Sydney: UP 0.3 per cent to $1,026,418
Brisbane: UP 0.3 per cent to $558,372
Adelaide: UP 0.4 per cent to $476,249
Perth: UP 0.3 per cent to $465,521
Hobart: DOWN 0.2 per cent to $512,688
Darwin: UP 1.1 per cent to $473,984
Canberra: UP 0.1 per cent to $702,861
Source: CoreLogic Home Value Index for April based on median house price changes
‘The eight per cent stamp duty doesn’t look so large when compared to the 20 per cent taxes in places like Singapore and Vancouver,’ he said.
Australia’s property market is facing a downturn, after a year of strong gains in Sydney and Melbourne that reversed a two-year slump.
NAB predicted capital city property prices would fall by 10 to 15 per cent during the next 12 to 18 months, as unemployment hit levels unseen since the 1930s Great Depression.
Sydney’s median unit price was expected to plummet by 8.8 per cent in 2020 followed by another four per cent next year.
That would see mid-point prices for an apartment dive by 12.8 per cent, or $99,576, to $678,364, going by CoreLogic data.
Melbourne was expected to take even more of a hit, with its median apartment prices tipped to plummet this year by 10 per cent, and by four per next year.
A 14 per cent dive by 2021 would see a typical apartment lose $82,349, compared with April 2020 median prices, to hit $505,855.
NAB predicted capital city property prices would fall by 10 to 15 per cent during the next 12 to 18 months, as unemployment hit levels unseen since the 1930s Great Depression
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