Chinese buyers grab billions worth of real estate in three months

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One quarter of all Chinese capital invested in foreign real estate in the first three months of 2015 was directed to Australia’s shores

New information from international real estate service firm CBRE shows that in the first three months of 2015, Chinese investors purchased US$4 billion worth of overseas real estate, with US$1 billion worth of that located in Australia.

That figure is almost as much as Chinese investors spent in Australia throughout all of 2014, when they purchased US$1.5 billion worth of real estate.

Growing ties between ourselves and the Asian superpower have been identified as one of the reason for the increased flow of capital.  

“Capital flows from China to Australia are complemented by growing numbers of Chinese tourists, students, settlers and an increased bi-lateral trade relationship,” CBRE’s head of Australian research Stephen McNabb said.

“Australia competes for capital with other markets globally, however the aforementioned factors appear to provide a longer-term underpinning for the capital flow now being experienced.”

From 1 January 2014 to 31 March 2015, Chinese investors became the second largest foreign direct purchases of commercial property in Australia, after Singapore and ahead of the US, and the flow of capital is not expected to slow in the near future.

“Flows from China into global markets are expected to remain firm, with potential upside, as regulatory changes over the past three years have allowed a higher investment allocate into real estate for life insurers, rising from 10% to 30%, and offshore investment to a limit of 15% across all asset classes,” McNabb said.

Inner city development sites, within a 5km radius of the CBDs of Sydney, Melbourne and Brisbane have proved to be the most popular targets among Chinese buyers, with CBRE analysis showing that 36 of the 116 sites sold in that radius in the 12 months to April 2015 were acquired by Chinese investors.

Sixteen of those sites were in Sydney, while 15 were in Melbourne and five were in Brisbane.

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