Chinese developers accounted for more than half of the almost $4 billion worth of inner-city residential sites sold in Sydney, Melbourne and Brisbane in the 12 months to April 2015 according to figures from real estate service firm CBRE.
According to CBRE’s ViewPoint analysis, Chinese buyers accounted for 58.4% of sales of residential development sites within five kilometres of the central business districts of Sydney, Melbourne and Brisbane.
In Sydney, the combined value of inner city site sales exceeded $2.5 billion in the 12 months to April 2015 – up 880% by value on the corresponding period in 2012.
Brisbane sales totalled $499 million, an increase of 635%, while inner city Melbourne sales totalled $1 billion, reflecting a 312% rise.
CBRE senior research analyst Jacob Fong said much of that growth has been driven by foreign investors and it has caused a change in how inner-city real estate is being utilised.
“The increase in turnover across these markets is a clear indication of the increasingly strong demand for residential development sites, largely being driven by foreign investment,” Fong said
“The buyer demand has transformed the inner city real estate markets in all three cities, where the highest and best use for sites has traditionally been commercial,” he said.
Recent estimates have suggested that 180,000 square metres of office space in Sydney alone
could be transformed into residential stock over the next four years.
This has also been exacerbated by changing demographics with in Australia.
“A further factor in the increased level of inner city construction has been a demographic shift across Australia towards smaller households,” Fong said.
“The traditional preference for detached homes is being challenged, with greater acceptance emerging for smaller units in inner city areas.”
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