Chinese investment in Australian homes down, but Victoria still No. 1 state
CHINESE spending on Australian property fell by $8.8 billion last year, as new taxes, restrictions and capital controls curbed investment from our most prolific foreign buyers.
But international property website Juwai.com expects “moderate increases” this year in Chinese demand for homes in Victoria — which remains their No. 1 target down under.
Juwai.com found buyers from China still splashed more than $19.4 billion on Aussie residential real estate in 2017, and $4.5 billion on commercial.
The nation was second only to the US for popularity among househunters from mainland China on the site last year, with buyers sinking more money into Victoria than any other Aussie state.
Juwai.com chief executive Carrie Law said Victoria received about $9.8 billion or 41 per cent of Chinese property spending in Australia last year — well ahead of New South Wales’ 32 per cent and Queensland’s 18 per cent.
Ms Law said China’s strict controls on capital flowing out of the country, Australian banks’ lending restrictions for foreigners, and federal and state government taxes and restrictions “all served to reduce Chinese investment last year”.
The latter included the Victorian Government hiking foreign buyer stamp duty surcharge from 3 per cent to 7 per cent in 2016, and introducing a “ghost tax” on vacant homes last year.
Point Cook is one of Melbourne’s most popular suburbs with China-based buyers. Picture: Luis Enrique AscuiSource:News Corp Australia
Despite this, Chinese still saw Australia as having “long-term value”, she said: “The majority of our residential buyers are purchasing … because they have children studying or working here, or because they plan to visit regularly or retire here.
“Australia offers a stable environment, safety, quality educational institutions, and the high quality of life.”
As offshore buyers are generally limited to buying new homes, suburbs with the most appealing house and land projects and new apartments are at the top of their hit lists — notably Point Cook, Doncaster, Southbank, Toorak and the CBD.
Kay & Burton’s head of international Jamie Mi said more Melbourne-based Chinese were obtaining permanent resident status, making them eligible to buy established homes as well.
“This means they can officially buy properties with 5.5 per cent stamp duty rather than a crazy 12.5 per cent stamp duty and avoid the heavy Foreign Investment Review Board application fee,” the agent said.
Ms Mi said Asian buyers at the top-end of the Melbourne market were becoming “younger and much more sophisticated”.
“They have travelled the world to understand different architectural styles and start to appreciate period homes more. Their taste is not limited to new homes or land,” she said.
CHINESE SPENDING ON AUSTRALIAN PROPERTY
-$23.9b worth of property purchased in 2017 ($19.4b residential property, $4.5b commercial)
-Down $8.8b on 2016
-About 41% of the spend went into Victoria, equating to $9.8b
-Top Melbourne suburbs for Chinese buyer inquiries: Point Cook, Doncaster, Southbank, Toorak and the CBD