A mergers and acquisitions specialist is adamant that brokers and others in the financial services market need to foster better ties with foreign investors.
Connect Financial Service Brokers CEO Paul Tynan recently travelled to Malaysia, and said there are huge commercial opportunities for Australia throughout Asia, as the region’s middle class grows and fuels demand for Australia’s services, products and property.
He found Malaysian businesspeople and high net worth professionals were seeking knowledge, networks and ideas in Australian financial services, property and agricultural investments.
But Tynan recommends to brokers that they “rediscover the art of relationships”, power of trust and ability to use appropriate connecting skills in order to harness the market.
“Asia has the capital and is willing to invest into Australia, but it is a lack of connection skills that is failing to bring parties together,” Tynan said.
Australia already exports 70% of its merchandise to Asian countries.
However, Tynan is adamant that Australian businesspeople need to be smarter ‘connectors’ and develop trade into key sectors, especially financial services, property, Islamic finance and agriculture.
“The story of the Asian century is old news however the recent ANZ
profit figures show diversifying your business towards the world’s growth engine can bring excellent results.”
But business relationships between Australia and Asia have sometimes been negative in the past, which Tynan attributes to a lack of understanding of Asian culture and way of doing business.
“For any commercial activity to succeed Australian businesses need to approach Asia with a clear understanding of the benefits and the pitfalls including the need to invest significantly in the time and effort that is required to establish a presence and reputation. Only then will it be a mutually beneficial investment and relationship for all parties,” he said.
“If Australian businesses have not yet looked to the economies to our north, they should do so as soon as possible.”
However, Australians seem to sit on the fence as to whether further foreign investment in the country’s real estate is a legitimate benefit or a concern.
The Inquiry into Foreign Investment in Residential Real Estate, which aims to find ways to increase the supply of new housing in Australia through foreign investment and will report by 10 October, has received many submissions from the public on foreign investors.
The inquiry was called following public concern that foreign investors, particularly from the fast-expanding Chinese economy, are becoming more active in Australia's property market and pushing prices beyond the reach of many local buyers.
Some submissions take a disparaging view to foreign investment, with comments alluding to price pressure on residential property pricing out the average Australian, or warning of foreign investors who are using wealth acquired by “suspicious practices” to outbid “hardworking Australian taxpaying citizens”.
However, other submissions supported the existing legislation. Australia has stricter rules for foreign investment than other comparable countries – existing rules usually limit foreign buyers to purchasing off-the-plan or newly built properties, so that they add to housing supply rather than soaking it up.