For the second straight year, Chinese investment in Australian real estate increased two fold. Locals are left wondering if they’re ever going to get a look in.
Chinese spending on residential and commercial properties rose to $24.3 billion in the 12 months ended June 30, up from $12.4 billion a year earlier according to the Foreign Investment Review Board’s annual report.
And it isn’t a trend, a fad, or a flight of fancy for the Chinese. It appears to be an ingrained sense of purpose. In a survey conducted by KPMG and the University of Sydney of Chinese investors, 100% wanted to allocate more money to Australia in general & real estate in particular.
The world’s second largest economy has an insatiable appetite for property, and the preferred taste is for almost anything Aussie. Last year China overtook the US as Australia’s largest foreign investor.
“Overall we are seeing a strong story of Chinese investment into Australia’s broader economy which is in line with premium products, services and lifestyle-oriented themes,” Doug Ferguson, head of KPMG Australia’s Asia and international markets and co-author of the report, said in a statement.
It seems the prices Australians view as astronomical, the Chinese regard as good value. Whether it’s a waterfront mansion or a two bedroom apartment in the suburbs there’s an excellent chance the buyer will have links to China.
Which is putting a lot of local noses out of joint prompting the government to tighten regulations and scrutiny of foreign investment. But for many it has been too little, too late.
Total foreign investment into Australia climbed 17 per cent to $194.6 billion in financial 2015 from $167.4 billion the previous year a huge proportion of which was directed towards real estate according to FIRB.
Where will it all end? In tears for local first home tryers. Even residents of Toorak and Vaucluse are being door knocked at odd hours either, by Chinese or their agents trying to induce them to sell.
As the world becomes more and more uncertain, more and more people are looking for safe havens south of the equator. The Chinese are leading the charge but many more are likely to follow. ‘Double or nothing’ may well become the catch cry of property sellers throughout Australian capital cities for years to come.