There is a strong likelihood Australian real estate is set to become even more popular with Chinese buyers following the decision this week by the Reserve Bank of Australia to cut the official cash interest rate.
Along with remedying low levels of inflation, the RBA’s decision on Tuesday was seen as an attempt to bring down the Australian dollar
and if that happens interest in Australian real estate among Chinese buyers is set to increase from its already elevated levels.
“The rate cut is likely to drive the dollar down further, making property more appealing to offshore buyers,” Charles Pittar, chief executive officer of Juwai.com, an online portal that markets offshore real estate to Chinese buyers, said.
“In the first half [of 2016], Juwai.com sent 25% more Chinese buying enquiries to Australia, over the prior half [of 2016], so we see demand accelerating, even if capital controls make the process longer for buyers who don’t yet have funds overseas,” Pittar said.
While many Australians still blame foreign buyers for high house prices
, Pittar said increased interest from the sector following a fall in the Australian dollar could benefit the property market.
A weaker exchange rate would mean new taxes levied against foreign buyers would lose some of their bite
, while it would also help foreign buyers soak up supply in markets that are at risk of being oversaturated.
“In [New South Wales and Victoria], a falling dollar could help ameliorate any impact the new buyer taxes might have on offshore property demand,” he said.
“In Queensland, a falling dollar could help increase demand for new developments throughout Brisbane and the Gold Coast by effectively giving them a price cut."
In particular, Pittar believes a low Melbourne will be the market of choice for Chinese buyers in the near future, with a low dollar, low interest and cooling capital growth making it an attractive location.
That opinion is backed up by those on the ground in the Victorian capital, who are already reporting Chinese buyers are looking to take advantage of the situation.
“Price growth isn't as rapid as last year. Chinese buyers see this as an opportunity to buy at a more affordable price in neighbourhoods that have seen rapid appreciation in recent years,” Robert Ding, sales executive with Melbourne based real estate agency Marshall White, said.
“I have a listing at 3 Compton Street in Canterbury
with three interested Chinese buyers. In a buoyant market, it would sell for $2.5 to $3m. They know this is a good time to buy in that area and are interested in obtaining the property for about $2m.
“About 60% of buyers at my inspections are Asian, either locals or from overseas.”
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