Trickle of investors expected to increase over next few years
Chinese buyers are beginning to re-enter the Australian market with an eye toward premium properties, leading to record sales in Sydney’s Upper North Shore.
A recent sales marketing conference in China for buyers looking to enter the Australian property market led to the $4.7 million sale of a townhouse in Linfield, according to a report by The Australian. The sale set a record for that type of accommodation in the suburb.
The property, located in the Wolseley Eight project, was one of the two most expensive on offer during the conference, The Australian reported. Both found buyers within an hour of launch.
All of the properties marketed at the conference by Plus Agency’s Peter Li were sold. Li told The Australian that sentiment from mainland Chinese and Hong Kong buyers had become more positive this year, likely due to eased restrictions and the reopening of international borders.
“Buyers wanted to come back, but the borders were shut,” Li said.
The record-breaking sale comes as new data from Investorist, an international property portal, showed that Asian buyers have begun to re-enter the Australian market. Investorist’s Asia 2022 International Property Outlook showed that throughout last year, Australia’s market share for residential sales dropped significantly, despite more than $2.6 billion in property being sold. Australia’s share, at just 2%, was on par with the European Union and Japan, while the majority was directed to the UK (51%), Southeast Asia (28%) and the US (15%).
However, Investorist founder and CEO Jon Ellis expects interest in Australia to increase over the next few years, as it is still perceived as a financial safe haven, The Australian reported.
“I don’t think [the border reopening] is an instant trigger because even if you look at the numbers of people coming in, it’s still a slow trickle,” Ellis told the publication. “Property buyers don’t like instability. Look at Europe at the moment – we’ve got a war waging between Russia and Ukraine and the UK is getting very heavily involved in that conflict. I think you’ll find that will dissuade Asian purchases; they will sit on the sidelines. I think Australia has always been incredibly attractive from an international perspective.”
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Overseas buyers have been trickling into the property market for the last six months, The Australian reported. In November, Plus Agency held its first launch event following COVID-19 lockdowns, advertising a luxury townhouse project in Linfield. The project sold out within two hours, posting a top price of $3.55 million.
Developers and agents have noted a change in the type of home overseas buyers are seeking – generally larger and designed to live in rather than rent. About 80% of Asian buyers looking to purchase in Australia intend to move here in the future, Li told The Australian.
“People are looking for oversized properties; they want to upsize,” he said. “The reason we can get the price … is because buyers don’t want standard. They will pay additional money to get what they want, and that is to customise for lifestyle. Maybe they are spending more time at home and have a kid, so they need an office to take calls, hold Zoom meetings.”
Ellis said the switch to higher-quality properties was due to many overseas investors getting burned on one- and two-bedroom investor-grade products over the past 20 years. Developers of those projects often promised capital growth and rental return that never happened, The Australian reported.
