Australia’s housing market is getting a leg up from some Chinese investors who are finding Australian cities lucrative property investment destination. The Chinese investors include both Australian-Chinese as well as mainland Chinese.
Market analysts vouch that the Chinese zest for Australian property has helped in propping up the sagging market that is facing the pressure of a tighter mortgage market. A mortgage market which has hardened the housing investment plans of Australians, reports Bloomberg.
“The Chinese demand — both from mainland China and Chinese-Australians — is propping up the market and boosting construction,” said Shane Oliver, chief economist at AMP Capital Investors in Sydney.
“Chinese buying in Sydney and Melbourne has stepped up from saying where it was five years ago, but publicity around that has created a perception which has run ahead of reality,” Oliver added.
According to Bloomberg, young Chinese investors are making good use of the opportunity in Australia and are backed by relatives in China.
McGrath, Australia’s only listed real estate agency, stated that half of the Chinese buyers are supported by relatives. The firm has guided sales worth $140 million for Chinese investors since its inception in September 2013.
At the same time, the Chinese influx also triggered concerns among locals that they are being priced out of the Australian property market.
The interest in Australian property by Chinese investors will not wane despite China’s devaluing its currency noted G T Hu, chief executive officer of the Australian unit of Country Garden Holdings.
“It didn’t feel to us that the stock rot in China impacted the market in Sydney,” said Luo Xiaohua, General manager of Shanghai-based Greenland Group’s investment arm in Australia.
He said the market is stable and the demand is strong.
Meanwhile, a study revealed that house prices in New Zealand, as well as Australia, are influenced by the same forces, reports New Zealand Herald.
The “two countries one market” scenario highlighted by the study said factors influencing cities in New Zealand as well Australia also include short-term immigration trends.
The study by Ryan Greenaway-McGrevy, Arthur Grimes and Mark Holmes of Motu Economic and Public Policy Research had scanned house prices in eight main cities of Australia and New Zealand.
The cities were Sydney, Melbourne, Brisbane, Perth, Adelaide, Hobart, Darwin, Canberra, Auckland, Wellington, Christchurch, Hamilton, Tauranga, Dunedin, Napier-Hastings and Palmerston North.
The research had the backing of New Zealand’s Ministry of Business, Innovation and Employment under its resilient futures programme.