Increased property taxes and strengthened foreign buyer legislation are unlikely to outweigh the main reason Chinese investors target Australian real estate, according to a major real estate marketing platform.
Malcolm Gunning, principal of Sydney based real estate agency Gunning, this week claimed that while the taxation and regulatory changes aren’t particularly onerous, Chinese buyers in particular believe they have been “singled out” by governments across Australia.
“The message that has been picked up in China and seconded through our client base is that Australia doesn’t want Chinese investment,” Gunning said.
“While the changes to stamp duty, land tax and increase in compliance powers granted to the ATO as well as rules to ensure foreign residents meet their capital gains tax liabilities aren’t unreasonable the message is what is of concern,” he said.
Gunning believes that perception could have a serious impact across the property market in Australia, in particular the apartment sector which could see projects “mothballed” as Chinese buyers take their money elsewhere.
But while Gunning believes Chinese buyers feel they are being picked on, not all in the real estate industry believes investors from the Asian superpower have been turned off Australian real estate.
“Nobody is sulking in the corner. In our experience, most buyers can easily separate state policy from anything directed at them personally,” Gavin Norris, head of Australia for Juwai.com, an online portal that markets real estate to Chinese buyers, told Your Investment Property.
“The number of enquiries buyers made via Juwai.com to property sellers in Australia was 37% higher in July than in June,” Norris said.
James Pratt, director of auctions for real estate franchise Raine & Horne, also agreed with Norris and said foreign buyers are made to feel welcome in Australia, particularly by the real estate industry itself.
“I think international buyers do feel welcome. Through the sales process, and especially at auction, it’s common to see real estate agents going out of their way to help buyers who don’t speak English as their native language,” Pratt told Your Investment Property.
“They will write the price down for them, in case they can’t follow the auction. It’s the same they would do for any local buyer who needed extra help,” he said.
Norris said there may be a few Chinese buyers who are put off Australian real estate following the legislative changes, but many will still target our shores due to reasons that aren’t price related.
“Undoubtedly, some buyers will decide the new taxes change the equation for the worse, but it’s too soon to say how many,” he told Your Investment Property.
“The majority of Chinese buyers of residential property in Australia are at least partly motivated by education. As long as their children are studying at Australian schools or universities, they still have a strong incentive to provide a safe and comfortable home away from home.
“The taxes do raise the price of entry, but they don’t affect any of the push factors that are encouraging Chinese to invest in property.”
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