Why Chinese investors keep buying Australian property?
May 22, 2017 - Australia
Up to 80% of foreign property demand in Australia is from China and despite numerous impediments, they are set to continue to grow.
That’s the view of the new Australian Investment Strategy from Credit Suisse, which details new state government data about foreign demand.
Buyers who do not have Australian passports purchased A$4.9billion of New South Wales (NSW) housing and A$3.1billion in Victoria in 2016.
“Sydney house prices have more than doubled since 2009. Melbourne house prices are up 90%. Residential real-estate in Australia’s two largest cities now rank as the second and sixth most expensive in the western world. It is clear housing demand is outstripping supply and we find the marginal buyer of Aussie housing continues to be from China.
“Shanghai? Shenzhen? Sydney! We forecast Chinese demand for Aussie housing will continue to grow. It will be supported by Chinese wealth creation, attractive valuations (when compared to Tier 1 cities in China) and closer economic integration.
“While Australian housing is at peak cycle, we believe the pace and severity of the coming downturn will be cushioned by Chinese demand. We add Adelaide Brighton to our Long portfolio.”
Although Australian authorities have introduced taxes on foreign purchases of local property, Chinese buyers have not been deterred, says the report.
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