The Australian property market is receiving a resurgence of Chinese influence in current times; in the 1850’s gold was their objective – now it is property investment. Foreign investors are becoming more prominent largely due to the instigation of a Significant Investor Visa, which allows foreigners to migrate comfortably when financing more than $5 million in approved investments.
It is no secret why the Australian government is endorsing the visa – just 60 applicants would create $300 million dollars worth of revenue for the Australian economy. The Sotheby’s agent, Michael Pallier believes the visa will be highly sought after: ”I believe the prediction this year is that 700 people will take up the visa, so that’s … $3.5 billion that should come into the economy.” Even greater remuneration will be spread throughout Australians via stamp duty and agent’s commissions.
Sandy Kogan, a Richardson and Wrench Bondi Junction agent attests to the great interest in Australian property from overseas investors: A recent property in Coogee had 50 contracts out on it, and following a manic nine way bidding war it sold for $2.71 million – $700, 000 more than the reserve price. “…It shows the level of confidence in Australia and the vendors are over the moon.
The special visa has been in place since November 24; there are currently 131 applications being processed. Chinese Investors have spared no time in planning their purchases: already viewing homes less than a month later. Daniel Ugar of Ray White Double Bay says the Coogee property was an anomaly: “I haven’t seen an auction like that for years.”
The Chinese government has recently doubled sales taxes on properties in Hong Kong; alongside the availability of the market in Australia, as well as the Significant Investor Visa which highly promotes foreign investors, there is no doubt that Australia will receive a large influx of offshore interest. As an Australian interested in the property market, the Chinese demographic will be a crucial aspect in decision-making. Apt preparation and targeting of this large sector of the investment community is necessary.