Foreign property buyers, particularly those from China, see Australia as an "appealing" and "safe" country for investments, according to an analysis by Juwai IQI.
Georg Chmiel, executive chairman of Juwai IQI, said Chinese buyers are increasingly making enquiries on Australian real estate market. In fact, interest from Chinese buyers doubled in April.
"Australia was already appealing as a safe country where your investments are protected. Now, the country seems to have managed the pandemic well. That makes it even more appealing to foreign buyers,” he said.
Chmiel said the first three months of the current year were challenging, affected by the restrictions rolled out in March.
"The travel restrictions and social isolation measures made that difficult. Now, the Australian market is beginning to open up slowly. That's a positive development that will make marketing and closing sales progressively easier," he said.
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Of all the property markets in Australia, Melbourne remained the top city for foreign buyers. Chmiel said Chinese buyers often go for newly-constructed units and houses, with values ranging from $610,000 to $1m.
"They prefer homes near good schools and universities and convenient to services, transit and shopping," he said.
The Foreign Investment Review Board recently released its annual report for 2018-2019, which showed a drop in Chinese real estate investment into Australia. During the financial year, investment from Chinese buyers hit $6.1bn, the lowest level since 2012-2013.
"Our buyer enquiry data shows that Chinese investment in Australian real estate fell for a long time, from late 2016 right into the first half of 2019. That's nearly three years of declining Chinese buying. The tide may have turned because Chinese buyers seem to be coming back since the second half of last year," Chmiel said.
Chmiel said the factors that were limiting activity from foreign investors started to loosen up.
"Non-bank lenders are again willing to finance Asian buyers. The 8% stamp duty doesn't look so large when compared to the 20% taxes in places like Singapore and Vancouver. And, after years of globalization, Chinese have accumulated more overseas wealth that they can freely invest outside of China.”
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