This article is from the Australian Property Journal archive
THE flow of Chinese capital into global real estate markets shows no signs of slowing and Australia will continue to be one of the main recipients, according to Knight Frank.
Knight Frank’s report titled, China Outbound Real Estate Investment:New Waves, New Destinations, found by the end of 2015, the total Chinese outbound capital has reached nearly US$30 billion, doubling that of 2014.
Knight Frank’s head of research & consulting Australia Matt Whitby said in 2015, Australia continued to see rapid growth from China, with Sydney and Melbourne the focus. The China-Australia Free Trade Agreement, the Qualified Domestic Individual Investor or QDII schemes are expected to drive more Chinese investment in the Australian property market.
“Investor interest in Australia, particularly in Sydney, has not diminished as many had feared – even after the latest RMB devaluation and with demand for natural resources weakening.
“Australian prices, coupled with strong Chinese buying power and continued weakness in the Australian dollar, has continued to attract capital inflow,” he added.
Head of Asian markets Australia Dominic Ong said in 2015, Chinese outbound investment into Australia, saw Sydney and Melbourne attract a total of US$3.8 billion.
“From 2010-2015 Chinese investment into the Sydney and Melbourne markets has skyrocketed. Given the level of growth that we have experienced over the past five years, we anticipate that the outflow of Chinese investment into Australia will remain at steady and strong levels but it will be difficult to beat 2015.
“This is particularly the case given one transaction alone in 2015, CIC’s purchase of the Investa Portfolio, was worth $2.45bn. This was a significant contributor to the final figure,” Ong said.
According to Ong, Chinese investment activity will be focused on development sites and office investments, focusing on prime product in the Sydney and Melbourne markets.
“The best, most prime development sites and offices in the best locations will attract the most attention,” he added.
Ong predicts some growth in 2016, but potentially not levels as high as Australia has seen in the last few years.
“I expect demand will be strong for the next three to five years, but what might affect the transaction volume will be supply –the lack of available prime stock available in the best locations,” he forecast.
Australian Property Journal
