Chinese insurance company Ping An Insurance is offering investors no deposit home loans... Sunshine Coast another Queensland market gaining investment popularity...
Chinese investors offered no deposit loans for Australian property
Chinese investors looking to invest in the Australian property market are being given the opportunity to do so thanks to loans carrying interest rates more usually associated with credit cards.
According to reports in the Australian Financial Review, Chinese insurance company Ping An Insurance is offering investors no deposit home loans with interest rates of more than 10%.
According to the AFR, the loans from Ping An are available to Chinese investors looking to buy into two developments in Melbourne and the Gold Coast, but could be rolled out for more developments if they prove popular.
The loans from Ping An would cover 30% of the purchase price of a home in Australia and would carry an interest rate of 14%.
Chinese investors would then turn to Australian lenders to secure finance for the remaining 70% of the purchase price.
The loans are being promoted to Chinese investors by property agency Austpac.
"You can walk into one of our seminars without a dollar in your pocket and still buy an Australian property," Austpac manager Eddie Yuen told the AFR.
While the interest rate may seem high, Yuen told the AFR it is lower than what many people pay for personal loans in mainland China, which can be as high as 16%.
Yuen also denied the loans were designed to be attractive to investors looking to flip the properties for a quick profit.
"We would never promote the loan for speculation as this is not smart for Australian property, where costs like stamp duty are high," Yuen told the AFR.
The loans are also required to be secured against a property in China that the investor owns outright.
While loan arrangements such as these may seem extreme compared to Australian lending practices, it may just be a case of firms cashing in on the demand for Australian real estate among Chinese investors.
That demand is increasing according to Andrew Taylor, co-chief executive officer of Juwai.com, which markets Australian real estate to Chines buyers.
“China is just beginning to deregulate its capital export controls, its economy is still growing at something like twice the rate of developed economies, and its people are big believers in real estate as an asset class,” Taylor said.
Sunshine Coast another Queensland market gaining investment popularity
While Brisbane, and to a lesser extent the Gold Coast, have become the focus for many investors in recent times, the next region north on the Queensland coastline is also proving to be attractive.
There are currently a number of major infrastructure projects underway on the Sunshine Coast, which is around 100km north of Brisbane, and these are helping the region draw in investors from across the country.
“I’ve been trying to a buy houses in a few areas recently and it’s proving to be a pretty hard job at the moment,” Karen Young, principal and director of buyer’s agency Property Zest, said.
“The market up here is definitely pretty hot at the moment, it’s pretty common to see houses sell for a fair bit over what the banks are valuing them at,” Young said.
Covering around 3,100 square kilometres and with a population of more than 300,000 at the last Census in 2011, the Sunshine Coast is a relatively large area, but Young said investors are targeting some specific areas.
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“The area’s that we’re seeing become popular are the ones near the big infrastructure projects that are happening up here at the moment,” she said.
“There’s an expansion of the Sunshine Coast Airport happening, the Maroochydore Town Centre redevelopment and the Kawana Hospital project and anywhere around there is proving really popular at the moment.
“Brisbane’s obviously been really popular recently, but over the last six months or so more and more people are realising what’s happening on the Sunshine Coast and that the area has a bit to offer.”
A report this week from Place Advisory put the region’s median house price at $480,000, but Young offered some words of caution to investors who might be attracted by that level of affordability.
“The Sunshine Coast is a big area and there a plenty of different areas across it. $480,000 might get you a house in Aroona, but it’s not going to get you one in somewhere like Bokarina, so you do need to know what you’re
looking for.
“There are some areas that are more home buyer territory and then there are areas that are the investment ones. We try and educate people about that that, but to be honest most investors that are coming up here already have a pretty good idea of what are the best areas to buy in.”
While Young focuses on established properties, she did say that the area is seeing a number of house and land releases come on line, suggesting the area is becoming increasingly popular with homebuyers too.
Chinese investors looking to invest in the Australian property market are being given the opportunity to do so thanks to loans carrying interest rates more usually associated with credit cards.
According to reports in the Australian Financial Review, Chinese insurance company Ping An Insurance is offering investors no deposit home loans with interest rates of more than 10%.
According to the AFR, the loans from Ping An are available to Chinese investors looking to buy into two developments in Melbourne and the Gold Coast, but could be rolled out for more developments if they prove popular.
The loans from Ping An would cover 30% of the purchase price of a home in Australia and would carry an interest rate of 14%.
Chinese investors would then turn to Australian lenders to secure finance for the remaining 70% of the purchase price.
The loans are being promoted to Chinese investors by property agency Austpac.
"You can walk into one of our seminars without a dollar in your pocket and still buy an Australian property," Austpac manager Eddie Yuen told the AFR.
While the interest rate may seem high, Yuen told the AFR it is lower than what many people pay for personal loans in mainland China, which can be as high as 16%.
Yuen also denied the loans were designed to be attractive to investors looking to flip the properties for a quick profit.
"We would never promote the loan for speculation as this is not smart for Australian property, where costs like stamp duty are high," Yuen told the AFR.
The loans are also required to be secured against a property in China that the investor owns outright.
While loan arrangements such as these may seem extreme compared to Australian lending practices, it may just be a case of firms cashing in on the demand for Australian real estate among Chinese investors.
That demand is increasing according to Andrew Taylor, co-chief executive officer of Juwai.com, which markets Australian real estate to Chines buyers.
“China is just beginning to deregulate its capital export controls, its economy is still growing at something like twice the rate of developed economies, and its people are big believers in real estate as an asset class,” Taylor said.
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Sunshine Coast another Queensland market gaining investment popularity
While Brisbane, and to a lesser extent the Gold Coast, have become the focus for many investors in recent times, the next region north on the Queensland coastline is also proving to be attractive.
There are currently a number of major infrastructure projects underway on the Sunshine Coast, which is around 100km north of Brisbane, and these are helping the region draw in investors from across the country.
“I’ve been trying to a buy houses in a few areas recently and it’s proving to be a pretty hard job at the moment,” Karen Young, principal and director of buyer’s agency Property Zest, said.
“The market up here is definitely pretty hot at the moment, it’s pretty common to see houses sell for a fair bit over what the banks are valuing them at,” Young said.
Covering around 3,100 square kilometres and with a population of more than 300,000 at the last Census in 2011, the Sunshine Coast is a relatively large area, but Young said investors are targeting some specific areas.
#pb#
“The area’s that we’re seeing become popular are the ones near the big infrastructure projects that are happening up here at the moment,” she said.
“There’s an expansion of the Sunshine Coast Airport happening, the Maroochydore Town Centre redevelopment and the Kawana Hospital project and anywhere around there is proving really popular at the moment.
“Brisbane’s obviously been really popular recently, but over the last six months or so more and more people are realising what’s happening on the Sunshine Coast and that the area has a bit to offer.”
A report this week from Place Advisory put the region’s median house price at $480,000, but Young offered some words of caution to investors who might be attracted by that level of affordability.
“The Sunshine Coast is a big area and there a plenty of different areas across it. $480,000 might get you a house in Aroona, but it’s not going to get you one in somewhere like Bokarina, so you do need to know what you’re
looking for.
“There are some areas that are more home buyer territory and then there are areas that are the investment ones. We try and educate people about that that, but to be honest most investors that are coming up here already have a pretty good idea of what are the best areas to buy in.”
While Young focuses on established properties, she did say that the area is seeing a number of house and land releases come on line, suggesting the area is becoming increasingly popular with homebuyers too.
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