Business Spectator rolls out a vested interest in defence of Chinese property investors today, Michael Yang, CEO of GiFang.com, the largest Chinese language property site in Australia, who sets about busting four myths:
Chinese buyers use cash:
There is a widely-held belief that Chinese buyers pay for their real-estate purchases in Australia in cash and there is little need for them to borrow. This could not be further from the truth. In fact, according to a recent survey from GiFang — a Chinese-language website that specialises in selling property to overseas investors — conducted across 283 buyers online, 97 per cent of Chinese buyers in Australia rely on mortgages.
Chinese buyers purchase sight unseen:
In our survey conducted in China, 63 per cent of buyers say they will ask a friend or relative based in Australia to inspect the property for them, and the remaining 37 per cent believe it is a must for them to inspect the property personally before making the final decision.
Chinese buyers pay too much:
This is perhaps the biggest misconception of all. The reality is, purchasers from a foreign country are less likely to know what the market price is, and let alone be able negotiate a lower price.
Chinese buyers land bank:
…Gifang’s surveys in China show that more than 90 per cent consider rental yield an important aspect to their property purchase, with the acceptable rental yield at 5 per cent.
I’m not sure this does anything to assuage anything, if that’s its intention:
- where the money comes from is largely irrelevant to priced out locals
- getting a relative to inspect is still sight unseen
- favourite Chinese areas are obviously more inflated than surrounding suburbs
- 5% yield buys nothing in Australia
None of that is to say that Chinese buyers are per se a problem. But framing the issue like this does not address any concerns about the issue either way.
