Australia no longer top choice for Chinese investors

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Demand coming from Chinese investors dropped, with Australia falling to the 2nd place in the list of countries where Chinese agents are selling, according to Investorist’s China 2019 International Property Outlook.

Australia accounted for 45.9% of the agents’ responses. The USA, meanwhile, landed on the top spot with 48.4%.  In the next 12 months, fewer agents (26.4%) are looking to sell in Australia. The country came behind the USA (40.3%), Europe (39.6%), Thailand (39%), and the UK (28.3%).

Data showed that education still drives investment, with 74.8% of survey respondents listing 'children’s education' as the top reason to buy in a particular country.

“Understanding Chinese property investment trends over the past 12-24 months could be likened to how water flows: it moves along the path of least resistance. So countries which offer the ‘least resistance’ in terms of taxes, foreign investment regulations, pricing, and conducive immigration conditions are most attractive for Chinese agents sourcing properties for clients. Thailand is a good example, with 39% of Chinese agents saying they were selling Thailand for the next 12 months, up from 24% in 2017,” said Jon Ellis, Investorist founder, and CEO. “It’s common in China for family members and friends to pool their resources in order to fund purchases so that they comply with government regulations (maximum of $50,000 USD per person per annum can be taken out of the country), but can still continue to invest in overseas assets, especially if related to their children’s education. The industry is poised to see what decisions the Chinese government makes next in relation to foreign currency exchange. Moves up or down would have an almost immediate flow on effect in Australia and other markets. “

In Australia, loan availability is still the biggest issue for Chinese buyers. “Demand for Australian investment property has been significantly affected by increased taxes and banking restrictions making loans much more difficult to obtain for foreign buyers. We expect demand growth from China to remain flat for 2019. However, there is the possibility of Australia benefiting from the fallout of the US-China trade war, as some Chinese investors may be discouraged from US real estate investment or college selection for their children, and choose the familiarity of Australian investment instead,” said Ellis.

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