Chinese buyers are set to return in higher numbers to the Australian property market, with enquiries already the highest of all offshore markets according to Juwai. Picture: David Swift
Australia is now the most popular destination for Chinese buyers looking for property, with their presence set to surge in the next two years as high income Sino households spike by 50pc.
Australia leapfrogged perennial favourites Thailand and the USA in the latest Juwai IQI’s report, breaking into the lead in 2022 and cementing it in the first half of this year.
Juwai IQI co-founder and group CEO Kashif Ansari said Australian homes were drawing the highest number of cross-border buyer enquiries out of China in the current year through to June.
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Stubbornly high real estate values and solid rental demand are big drawcards for international investors including higher income Chinese buyers. Picture: Liam Kidston.
“The most popular destinations are all the traditional, wealthy Anglo countries with world-leading educational sectors,” he said. “Australia, Canada, the United Kingdom, and the United States occupy the top four spots on the list in the first half of the year.”
“Southeast Asia also dominates the list, with Thailand, Malaysia, Vietnam, and Singapore all in the top 10.”
He said the only non-Anglo, non-Southeast Asian destinations in the top 10 were Japan (7th) and the United Arab Emirates (8th).
“The UAE has moved up the list rapidly in recent years. After ranking 13th in 2021, the UAE entered the top 10 for the first time in 2022 at ninth and this year placed eighth,” he said.
The resurgence in interest in Australian homes comes more consumers there look set to have the type of capital needed to invest in international real estate.
“Even with China’s slower economic growth in 2023, the country is adding more households to the upper-middle and high-income classes than any other,” Mr Ansari said. “Logically, Chinese demand for international real estate will also increase proportionately. The number of upper-middle and high-income urban households swelled by 39m between 2019 and 2021. It should climb by another 71m — to a total of 209m — by 2025.”
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With Chinese home prices declining, buyers are drawn to international real estate with guaranteed price appreciation and long-term foreign currency income.
He said historically those high income households had high levels of savings that could be invested – a factor which grew during the pandemic, accentuated by the fact that Chinese savings deposits soared by $US3.6trillion in the first nine months of last year.
“They are also looking overseas for opportunities to invest this money,” Mr Ansari said with China’s domestic market is not as strong as in previous years. He said existing home prices declined by 0.7 per cent in China in April and remain about 10 per cent below their 2021 high and lower than in 2018.
“Overseas, Chinese investors are drawn to real estate investment as an easily understood category that is expected to provide price appreciation and dependable long-term foreign currency income that is uncorrelated with the Chinese economic cycle,” he said.
“In this era of higher interest rates, Chinese investors with access to ready capital have an advantage over local buyers.”
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