Melbourne is set to remain Australia’s Chinese buyer capital this year, with the market downturn expected to rustle up interest among those seeking “a bargain”.
A new report by leading international property website Juwai.com has named the “desire to get a bargain while the market is soft”, combined with the fact Chinese are generally getting richer, as major factors to push investment down under this year.
Other drivers would be a lack of property investment opportunities in China, a possible transfer of investment from the US to Australia due to the trade war, and the weakening of the yuan making purchasing in other countries more expensive.
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But while Chinese interest in Australian property remains hot, actual buying activity has dropped and is expected to remain “flat” in 2019, according to the Juwai.com report.
Juwai.com chief executive Carrie Law said residential buying inquiries on the site fell 20 per cent in 2018 compared to the year prior.
But they picked up in the final three months of year to trump the 2017 December quarter by 58.1 per cent
Demand is forecast to be “mostly unchanged from 2018” this year, assuming there are no significant economic or policy changes.
Ms Law said Chinese buying in Australia was being held back by factors including foreign buyer taxes, difficulties obtaining finance and capital controls in their home country.
“A substantial change in any of these areas could lead to a corresponding increase in buyer activity,” she said.
Juwai.com expected Chinese to continue to be Australia’s most prolific offshore purchasers, and Melbourne to continue to be their most sought city.
“According to Foreign Investment Review Board data, (Victoria) receives about $4 of foreign real estate investment for every $3 that goes to New South Wales and for every $2 that go to Queensland,” Ms Law said.
“Melbourne retains clear advantages over Sydney in terms of lifestyle, prices, and also a foreign buyer stamp duty that, at 7 per cent, is one point lower than the NSW equivalent.”
Juwai.com has previously named the CBD, Point Cook, Doncaster, Southbank and Toorak as the most popular Melbourne suburbs among its users.
It’s also named Geelong among the regional cities in Chinese househunters’ sights.
Realestate.com.au chief economist Nerida Conisbee said offshore buying in Australia remained “fairly subdued”, with the struggle to obtain finance and extra taxes major deterrents.
She said those who were househunting in Melbourne were focusing on university suburbs like Carlton and Clayton, and areas offering house and land packages like Point Cook.