This article is from the Australian Property Journal archive
AUSTRALIAN real estate might be the “ultimate revenge purchase”, according to pan-Asian property portal Juwai, which is tipping Chinese investment will surge by 30% in 2023.
“Chinese buyers are back”, said Juwai IQI co-founder and group managing director, Daniel Ho said, and more will come in the second half of this year than in the first.
As happened in the United States and Australia, Chinese buyers are exiting the pandemic with more money in the bank – they added more than US$2.6 trillion to their bank balances in 2022, and bank deposits now exceed US$18 trillion. The figure is larger than the country’s entire gross domestic product and 11% higher than would be expected from pre-pandemic trends.
“Neither the Chinese housing market nor the stock market is attractive enough right now for Chinese to invest their savings. The confidence many Chinese had in their own economy and housing market declined during the pandemic, so overseas markets like Australia look better by comparison,” Ho said.
“In China, they talk of ‘revenge spending’ as people who have been under lockdown splurge on all the things they couldn’t buy during the lockdowns. Real estate in Australia might be the ultimate revenge purchase.”
Natixis chief economist Alicia Garcia Herreo has estimated that before the pandemic, individuals from China moved about US$150 billion overseas each year, and predicts that will probably be higher in 2023 due to catch-up activity after three years of lockdowns.
According to Juwai IQI data, about one-third of Chinese buyer enquiries go to Melbourne, one-quarter go to Sydney and one-fifth each to Perth and Brisbane.
China continued to be the largest source of foreign Australian residential real estate investment proposals by number and value in the December quarter, according to the Foreign Investment Review Board, at $600 million across 440 proposals.
NAB’s latest residential survey found the overall market share of foreign buyers in new property markets rose to 7.9% during the March quarter, underpinned by NSW’s steep increase to 16.2%. The share of foreign buyers in Victoria, however, fell to a two-year low of 4.0%.
