This article is from the Australian Property Journal archive
A SIGNIFICANT number of Chinese buyers are circling Melbourne's prestigious suburbs for luxury homes, willing to spend up to $15 million for mansions in Toorak, according to RT Edgar director Jeremy Fox.
Although Fox recently sold a mansion in 59 Hopetoun Rd Toorak to a local buyer for $15 million, he told Property Review that there were three offers on the home – one from a Chinese family, an Australian expat family returning from the United Kingdom and a local.
He sold the three storey mansion on behalf of Hong Kong expat Malcolm Dumenil.
The property comprises separate self-contained living quarters, a cinema with bar, five car basement garage, gym, cellar, five large bedrooms all with ensuite bathrooms and walk in robes, two full kitchens, steam room, sitting room opening to alfresco dining area which leads to west facing rear garden with water feature.
The property was originally listed for sale by agents Kay & Burton in April last year with an asking price of $13 million.
Fox said he had the property on the market for only a month before it was snapped up.
Fox said whilst the market is healthy with local buyers and wealthy Australian expats who have made their money overseas and are looking to move back to Australia, there are surprisingly a high number of Asian buyers on the market looking for prestige homes.
He added that he currently has three Asian clients who are looking to spend $10 million to $15 million on a prestige property in Toorak.
“Surprisingly there are a lot of Chinese buyers in the market right now for homes up to $5 million.
“And the odd one or two who are willing to spend $10m-$15m,” Fox said.
The increase in demand from Chinese buyers could be attributed to the federal government’s recent changes to the Significant Investment Visa (SIV) rules.
Knight Frank has formed a specialist Asian Markets division targeting high net worth individuals from Asia, particularly China to capitalise on the changes to the SIV.
Dominic Ong has been appointed as director based in the Sydney office. He previously spent five years with CBRE in Auckland, and the last two years in Sydney and has built a significant contact based within the Sydney Chinese community.
Ong said the subclass number 888, the rules for SIVs seem to be in favour of Chinese investors.
“Although the rules of the SIV specifically exclude direct investment in real estate, SIV applicants are allowed to invest in an unlisted Managed Fund that holds Australian direct property assets and/or a trading business/ company,” he added.
Ong said the SIV means investors can invest $5million in approved investments for four years to be eligible for permanent residency.
“Whilst certain aspects of this may deem to be controversial amongst some people; Australia will not only benefit from this initial $5 million direct investment, but will also profit in the long term, as most of these investors (most likely successful business people or entrepreneurs) have a net worth in access of $50M or $100M and will be looking for other investment opportunities once they arrive.
“With the recent Sydney purchases of the Sydney Water Board site ($100M), 231 Elizabeth Street ($201M), 1 York Street ($117M), 10 Barrack Street ($62.5M), 333 Kent Street ($48M), 80 Alfred Street ($49M) and the Palazzo Versace Hotel in Queensland ($68.5M), Chinese investors are becoming even more prominent on our local shores.
“During my recent visit to Shanghai and Beijing, we are seeing Chinese investors increasingly looking to diversify their portfolios and they view Australia as a safe haven and a long term investment destination.
“We are currently working with some 20 groups of Chinese investors sourcing office towers and shopping centres to hotel investment and land development projects,” Ong said.
The Asian Markets division has also appointed Andy Hu, formerly of Drake Commercial, as executive, investment sales and leasing.
Property Review
