Hundreds of thousands of the richest people in China plan to pour millions into the Australian property market over the next three years, injecting new life to a property boom that analysts have long expected to go bust.
The Hurun Report, a Shanghai-based rich list compiler, recently surveyed high-net-worth individuals in China (i.e. people worth more than US$1.5 million). The survey found that 800,000 of these high-net-worth individuals planned to transfer their money abroad, with Sydney and Melbourne being the investment destination of choice for many.
The Hurun Report also found that many Chinese millionaires hoped to move to Australia.
The depreciation of the yuan has been blamed for the flow of capital from mainland China to the Australian property market. Australia also appeals to Chinese millionaires because of the world-class healthcare, as well as superior investment and educational opportunities.
Rupert Hoogewerf, publisher of the Hurun Report, said that prices in China’s major cities have risen so quickly in the past year that “an overseas house seems to offer [investors] good bang [for their] buck.”
The survey found that 60% of the country’s wealthiest people planned to buy overseas properties over the next three years, with an average budget of 5.8 million Chinese yuan ($1.12 million).
“China currently has 1,340,000 high-net-worth individuals, defined as individuals with US$1.5m, so that means we are looking at a massive 800,000 individuals who want to buy property overseas over the next three years,” Hoogewerf said.
Melbourne has been ticked by 3.9% of the respondents as their preferred destination for emigration and property purchase, followed by 3.8% for Sydney and 0.2% for Canberra. Although the demand for real estate property in the west coast of the United States is much higher, the level of interest in Melbourne and Sydney indicates that Chinese capital will continue to flow into these cities.
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