Last week, real estate firm Juwai IQI released a report claiming that 712,000 people from China will migrate to the US, Canada and Australia from 2023 to 2025.
Juwai found that Australia was the top overseas destination for Chinese property buyers in the first half of 2023, based on the number of buyer inquiries it received on its platform.
The results followed a recent report from The SMH claiming that “cashed-up Chinese buyers have re-entered Sydney’s property market with gusto”.
Last week, prominent Sydney real estate agent and auctioneer, Tom Panos, appeared on Radio 2GB with Ben Fordham where he suggested that Chinese buyers are more active in the market than the official Foreign Investments Review Board (FIRB) data suggests.
Ben Fordham: “How big is it [Chinese investment]?”
Tom Panos: “Look it’s probably bigger than what that report says because often what you’ll see is at an auction is, you’ll have an international buyer and they’ll be on the phone talking to someone else”.
“And you you’ve got to follow the money trail. How many more properties are actually being funded by overseas buyers?”
“But it is an issue and you can sense resentment at auctions where there’s a competition between a local buyer and an international buyer and you’ll see when the international buyer wins, they don’t get the applause that they’d normally get if they were a local buyer”.
“So you can tell there’s tension there. I mean, it’s hard to track where the real buyer is when you see someone standing there with a mobile phone because, well you don’t know where they are”.
“It may be a foreign buyer in China or elsewhere giving him instructions as to what price to go to and at what price price to stop at”.
“Chinese people love Australian real estate. They love the education system here. They love what’s going on with their lifestyle. They love the fact that it’s probably less polluted and it’s a safe place”.
Ben Fordham: “There’s two sides to the coin though right, Tom? Because if you’re being outbid by a foreign buyer at the auction then you hate it. If you’re selling a house you love it right, because you’ve got someone with Deep Pockets who’s willing to to spend more than someone else who’s at that auction?”
Tom Panos: “Well I can tell you, when I do auctions on a Saturday, I often have the vendor say to the agent in front of me ‘have we got any Chinese buyers'”?
As I noted on Friday, the increased Chinese buyer activity helps explain why Sydney dwelling values have risen so rapidly despite ongoing interest rate hikes:
Most foreign buyers would purchase without a mortgage and would be unaffected by the RBA’s aggressive interest rate hikes.
Given the scarcity of for sale listings, growing demand from Chinese buyers is likely having a larger-than-usual effect on Sydney home prices.
