Over recent years, the Australian Government has relaxed some of the laws which were previously restricting foreigners from buying Australian real estate. And a recent report released by Global Investment Bank Credit Suisse has shown over the past 7 years, Chinese Investors have already purchased $24 Billion AUD worth of Australian real estate. The Credit Suisse report also projected Chinese Investors will spend an additional $44 Billion on buying more Australian properties over the next 7 years.
Why are Chinese Property Investors so Attracted to Buying Australian Real Estate?
Research conducted by HSBC Bank has suggested that 1/3 (one-third) of all wealthy Asians own overseas property. And the number 1 destination for buying property by affluent Asians is Australia. Furthermore, out of all of the wealthy mainland Chinese property investors surveyed by HSBC for this study, 9% (per cent) already owned property in Australia.
Australia’s warmer climate, magnificent beach coastline and relaxed lifestyle are all major attractions which lure affluent Chinese citizens into buying Australian real estate, however there are 3 main factors which primarily persuade Chinese investors into purchasing property in Australia:
1. Australian real estate is a proven secure investment – while other investment opportunities which were favored in the past (such as US Shares and European Bonds) are becoming increasingly volatile.
2. Wealthy Chinese families are beginning to invest in off-shore real estate (such as Australian real estate) as part of their property investment portfolio because of social concerns about political stability in China.
3. Australian property purchases are sometimes motivated by the need to establish residency for a Chinese family member in a safe prosperous country like Australia.
Head of Mortgages for HSBC in Australia, Alice Del Vecchio has said the following about their recent study, “It’s no surprise that Australia is highly regarded among affluent investors from Asia. Recent HSBC expat research shows Australia is consistently nominated as one of the top countries to live in amongst expats. HSBC’s research found that 71% of expats believe Australia provides a higher quality of life than the US and UK2.”
Alice Del Vecchio continued, “Australia’s appeal also extends to its community links with Asian countries. Close to 70% of Australia’s international students are from Asia, many of which stay in Australia long term to work or reside. We know from our own customer base that a large proportion of international mortgages in the past year have been located near universities.”
QLD (Queensland) is the Most Desirable Place for Asian Investors to Buy Australian Property
The HSBC research also indicates a very strong trend of Chinese investors broadening their scope from the more traditional real estate markets like Melbourne and Sydney, to other areas such as Queensland. Out of all of the affluent Asians surveyed who were looking to buy property in Australia in the next year, there were:
• 25 % who intended to buy property in Queensland (QLD)
• 23% in ACT
• 20% in Victoria (VIC)
• 18% in New South Wales (NSW)
• 16% in Western Australia (WA)
China’s largest International Property Website for Chinese Investors Juwai.com has also analyzed their latest data and found:
• Chinese investors prefer buying properties in more well-known areas around southeast Queensland – particularly on the Gold Coast, Brisbane CBD and inner-city suburbs.
• Around the Brisbane area, places such as Annerly, Sunnybank Hills, Yeronga, St Lucia and Alderly all made the top 10 list of popular spots for foreign Chinese Investment.
• On the Gold Coast, the most desirable spots for foreign investment were Ashmore, Benowa, Broadbeach, Burleigh Heads and Carrara.
• The most desirable regional areas for Chinese investment were the Sunshine Coast, Toowoomba, Cairns, Rockhampton and Townsville.
Andrew Taylor (the chief executive for Juwai.com) has also stated that QLD’s very reasonable property prices are still a major attraction for Chinese investors. Andrew Taylor said, “In Queensland, Chinese investors can live like movie stars for less than a two-bedroom apartment costs in Beijing. Apartments in Beijing sell for 111 per cent more than in Brisbane, on a per square metre basis.”
FIRB Exemptions Such as Integrated Tourism Resort (ITR) Help Make the Property Buying Process Simple for Chinese Investors
Certain property acquisitions and Australian real estate purchases do not require any prior notification or approval by the Foreign Investment Review Board (FIRB) under the Foreign Acquisitions and Takeovers Act 1975 (FATA).
In regular circumstances, all foreign property investors must obtain Australian government approval prior to acquiring an interest in Australian real estate. Chinese investors wishing to buy property in areas designated by the Australian Government as Integrated Tourism Resort (ITR) zones will automatically qualify for an FIRB Exemption and do not have to apply for these same government approvals.
Exemptions such as those given for buying property in ITR areas simplifies the Australian property buying process for Chinese investors and makes it much easier for them to buy Australian Real Estate.
Below is a list of Integrated Tourism Resort (ITR) areas located in Queensland (QLD), Australia:
[ITRs designated before September 1999]
• Hamilton Island Resort – Whitsunday Passage, QLD
• Hope Island Resort – Hope Island, QLD
• Hyatt Regency Resort – Coolum, QLD
• Kooralbyn Valley Resort – QLD
• Laguna Quays Resort Stage 1 – Repulse Bay, QLD
• Mirage Port Douglas Resort – Port Douglas, QLD
• Palm Cove Travelodge Resort, QLD
• Royal Pines Resort – Ashmore, QLD
• Sanctuary Cove – Hope Island, QLD
It is also important to mention that while applications for purchasing properties in ITR areas will normally be approved without conditions, developers are only permitted to sell around half of their projects to foreign buyers and investors. This ultimately means Australian properties cannot be marketed exclusively overseas – except for off-the-plan dwellings (which has become an extremely attractive option for foreign Chinese investors.
Are You a Foreign Property Investor? East Coast Buyers Agents Can Help you Purchase Australian Real Estate
East Coast Buyers Agents are experts at acquiring Australian Real Estate for Foreign Property Investors – especially in the Queensland area. ECBA work in conjunction with a large network of Australian Real Estate professionals in order to offer the best possible real estate options available in QLD. East Coast Buyers Agents also understand you would like to receive exceptional value for money when purchasing Australian real estate so we work endlessly to ensure you buy the best possible properties at the lowest possible prices.
To contact your personal East Coast Buyers Agent → CLICK HERE ←