Australia’s new free-trade-agreement (FTA) with China, announced last month, is set to bring an inflow of hot Chinese money directed at acquiring Australian real estate.
Justin Epstein, a founder and executive director at One Investment Group, said the inflow of Chinese funds will likely reach levels previously unseen.
“Australia is viewed by foreign investors as a safe haven, given our economic stability and transparent regulatory environment. In the past year, there has been significant buying activity among Asian investors interested in securing Australian residential land banks, hotels, office buildings and agricultural land holdings, and we expect this to grow substantially now that the agreement is in place,” he said.
Coupled with the falling Australian dollar making Australia an even more attractive investment location, Epstein says we can expect prices to be pushed up due to competition.
“The falling Australian dollar is making local property assets cheaper and more attractive to foreign investors seeking a stable market to invest their capital. This buying spree isn’t expected to slow and competition for quality assets between local and Chinese buyers will likely push up prices for in-demand locations in 2015.”
One Investment Group provides trustee and managed investment trust services to foreign investors acquiring Australian property and infrastructure. According to Epstein, the company is currently working on numerous foreign client transactions, totalling in excess of $AU1 billion in property assets.
Despite property prices likely to rise as a result of the FTA, Epstein says the never before seen levels of Chinese investment will also provide benefits to the Australian economy.
“As the global economy continues to improve and trade between Australia and China strengthens, the inflow of Chinese funds will likely reach levels previously unseen. This will hopefully provide a strong boost to the Australian economy and foster continued exchange between Australia and China,” he said.