By now, most of the world must have heard about the surge of Chinese investors keen on getting real estate investment in Australia. The investors are buying properties at a red-hot rate because of two reasons: personal use, or foreign investment.
This seemingly unstoppable force of demand is what drives the market even further, as it tends to affect the local economy of the areas with high demands of property purchase and rental. But when did all of it start? Why are these Chinese investors looking for properties outside their own country, and why is Australia their best choice? This is a brief history of the real estate relationship of the two countries.
Why Chinese Investors Are Not Investing Locally
The current and probably most visible problem in China is the space. Their population grows bigger every year, but their space is becoming more and more limited. While the demand becomes higher, a number of government-enforced laws limited individuals in buying properties, either for personal use or as an investment. Partnered with the local businessmen’s hesitation to invest due to the stock market crash years ago, the current decline of Yuan, and a risky economy, the Chinese investors are stuck with their money, unable to move it in directions.
This is where foreign property investment came to play. Seeing the potential in buying properties outside the country, investors looked at these properties either as a way out of the country, an opportunity to earn from the outside, and/or a luxury of status. Inspired by this movement in the market, major real-estate brokerage firms are now aggressively marketing houses on many Chinese-language websites, opening up a visible market for potential buyers from the region.
Attractive Real Estate Investment in Australia
Juwai CEO Charles Pittar once stressed that foreign investors are driven mostly by four things: investment, lifestyle, emigration, and education. And for these precise needs, Australia has become an apple in the eyes of the investors.
Buying Real Estate in Australia for Investment
Australia already looks great in Chinese consumers, as the country’s products are well-received and trusted in the mainland more than anybody else’s, even their own. Australia’s performance in the global market has also been consistent in terms of output and quality, with a steady and reliable workforce and the government’s adjustment capabilities to keep up with the investors and entrepreneurs of the current times. Along with its booming tourism, the country is a sure-fire hit when it comes to investing for properties. The demand for a house is steadily increasing as each year goes, and if you buy a property now chances are the values are sure to grow in no time.
The lifestyle is also a great factor for Chinese investors in choosing to buy Australian properties. As we all know, China is running out of space. The growing industries are pushing people to find homes elsewhere, and the government restrictions make it harder for the people to do so. Together with the pollution and overpopulation, citizens are looking for housing alternatives outside the country in hopes of getting out.
Even the elites and the middle class are looking for a change in scenery and security. They are looking to buy properties outside China to find a place where it is fairly easy to continue or start a career, is safe, and is generally a good place to live in. With China’s ever growing economic presence, it can be brutally quick for people to suddenly lose their place in the ranks of society. The local economy, the workforce, and the security all go hand-in-hand as investors choose Australia when buying properties. Of course, the rich might just buy properties in order to improve their rank in China’s status quo, having houses all over the world.
Education is also one of the key factors in Chinese investments of foreign property. The educational system in China can be very stiff and alarming for some. The schools are getting more and more crowded as the years pass, and they cater to a continuously growing number of students. The elites are afraid that this situation will not bode well for their children, and so they send them abroad in hopes of getting better education to better continue the family legacy. This influences cash-rich buyers to purchase properties for their children, while at the same time investing on what can be a vacation house or a rental in the years to come.
A Chance at a New Life in Australia
Emigration is the main factor that drives investors to look at Australia. The country has become a haven for immigrants and retirees, backed by a strict application process to establish order. Buyers are looking for ways to live outside the country where they can establish a business, buy a house, get better education, and live the lifestyle they want. In short, they are looking for freedom. And Australia can provide that. The government’s business laws are not less strict than before, properties are at a low cost, and the immigration laws are upheld by the government.
All in all, Australia is the perfect place to invest in, if as an investor you are motivated by these four main reasons.
Where in Australia are Chinese Investors Investing
When looking for a real estate investment in Australia, any location is acceptable. However, there are a number of places that Chinese investors are glancing at for its potential and established quality. The top three are Hobart, Sunshine Coast and Gold Coast.
Hobart is a top-rated suburban area in the country. Investors looking to purchase properties with plans to make it a rental or at least mark up its value are flocking to invest here are the cities make a comeback after hitting a low. Hobart’s participation in the shipping and tourism industry is the main reason why it picked up after low demands for 2015. It came back two years later with the highest growth rate in the whole Tasmanian estate.
Sunshine Coast struggled for a few years, but came back later thanks to a strong government backing and a solid commitment to the future. Bringing in more than 3 million visitors every year, it is the sight to see for travelers and one of the most visited places in the whole country. Beaches, theaters, malls, zoos, you name it, Sunshine Coast has it. And with this kind of tourism in its arsenal, the city is sure to reach for the skies. For a buyer looking to relocate, this place has infinite potential to provide you career security, education, facilities, and an active lifestyle. For investors, this is an opportunity to buy a spot in an often-overlooked city and reward yourself as the effect of local economy kicks in.
Gold Coast is another top-notched suburb that is returning to the market. As movers from Sydney are often directed here, the flow of people invited more business to prosper with the steady amount of workers looking start in the area. Affordability played a key role in its growth, as the properties here are cheaper than other neighborhood, all the while the demand is huge. Investing here now before the economic boom will prove to be beneficial to investors, while also providing a safe and secure place for immigrants.
Gold Coast is by far the best bet among these choices, and one of Australia’s major tourist destinations. With a perfect balance of nature and infrastructure, tourism and business, local art and wildlife, this city is guaranteed to provide everything one asks for. While the average traveler is enticed by the city’s nightlife, beaches, and tourist spots, the elite are flocking the city for the hundreds of restaurants, the abundance of golf courses, and the five star hotels and restaurants. The city caters to everyone. And the best part? It features high population growth coupled with low – priced properties. With the city still growing, now is the best time to invest in it.
Read our feature article on other top locations in Australia that Chinese Investors are looking into.
What is the Current State of Chinese Real Estate Investment in Australia
The current restrictions set forth by the government slowed down the Chinese investors’ foreign property purchases by 25% last year than the year before in 2016. However, the investors still spend more than $40B, among the top-most annual numbers. While the government is trying to cut down the ability of its citizens to buy offshore properties, investors are quick to find new ways and loopholes to work around this dilemma. This is the reason why hundreds and thousands of cash-rich buyers from the Asian country still attended the Luxury Property Showcase, despite the stricter legislative restrictions to buy property overseas.
Even as they lowered the foreign currency allowance of every individual to only $50,000 a year, Chinese investors still turn to Australia for property investment as the amount is enough to secure a down payment for an average-sized property, depending on the location of course. Up to now, the people and the brokerage groups are still working hand in hand in order to find easier ways to transact business, and right now the people’s needs are winning over the government’s ruling.
This is a brief history of Chinese investors in Australia. Be sure to keep this in mind if you are looking to join in on the investment business. Keep all these important factors in mind and invest on a property now before you run out good ones to choose from!