A recently released report has revealed what may be the beginning of a turnaround in Chinese residential investment in the Australian market.
Chinese buyer enquiries for Australian residential property have posted two consecutive quarters of year-on-year growth for the first time since 2016, according to the Juwai.com Chinese Australian Dwelling Investment Tracker 2019.
While plummeting property prices have kept foreign investors at bay, Juwai expects Chinese buying to pick up again in 2020, as the property market begins to recover.
Juwai CEO and director, Carrie Law, explained that the hefty Australian foreign buyer taxes that may otherwise have been a deterrent are being offset by the weakening Australian dollar.
"Australia appeals to Chinese buyers as one of the wealthiest peoples in the world, with a median individual net worth of US$191,453. Three Australian cities rank in the top 10 of the world's most liveable cities,” said Law.
"A buyer holding Yuan today needs the equivalent of $88,800 less in funds compared to 2017 to purchase an $800,000 dwelling. Thus, Australian state foreign buyer taxes have been counterbalanced by the plummeting Australian dollar, which has lost 11.1% of its value against the Chinese Yuan since July 2018. That compares to the 8% rate of the highest foreign buyer taxes, which are in New South Wales and Victoria.”
Currently, Melbourne is the Australian city receiving the bulk of enquiries from Chinese buyers at 43.8% as compared to Sydney’s 23.9%.
According to the report, Chinese students comprise 38% of the foreign student body in Australia and contributed $11.7bn in export income generated from international education activity in 2017.
Law said, "Young adults from China have helped turn education into Australia’s third largest export industry and the largest single services export. Chinese students generate more export education income than students from the next seven highest-ranking countries combined.”
“Anti-student policies in the UK and USA are likely to push Australian enrolments even higher,” she added.
Currently, Victoria and New South Wales together contain around two-thirds of all foreign students residing in Australia.