Just as the tiger focuses on their prey without distraction, Chinese investors appear to be doing the same with the Australian commercial and property development market. Despite a painful blow to the global economy due to the pandemic, Sino-Australian tensions, and a fall in foreign investment in the first half of 2020, many Chinese investors bounced back in 2021 with Melbourne, Sydney and Brisbane being the top 3 states on their priority list.
Toward the end of 2021, commercial property investment deals in excess of $10 million reached $35.4 billion, reflecting a 70% increase from the year prior. This was largely fuelled by government decisions to ‘live with COVID’; an attempt to regain economic normality and stability and help restore investor confidence to healthier levels. Today, data shows that Australia is now the top commercial property investment destination for Chinese property investors.¹
“Although America and the UK are still desirable locations to invest, Australia is still priority for Chinese investors” states Mr. Jay Song of Jinding, one of Australia’s most well-connected sellers of Australian property in China. “Australians are very open and friendly towards Chinese investment, have a favourable projected population growth, good climate and an already established Chinese population. There is confidence to invest in a future that is stable like this.”
So what are some other factors that are keeping investors active and hungry for property down under?
- Competitive yields with long term capital growth.
- Historically low vacancy rates in 2021 across the commercial sector.
- A projected population of up to 49.2 million people by 2066 which is almost double our existing population.²
- Australia’s deft handling of the pandemic compared to other countries such as the UK and US.
- The ability to utilise technology tools such as virtual walkthroughs, 3D mapping, drone surveys, webinars, video live-streaming as well as easy access to online data and documentation, all of which helps engage and inform those investors who may be affected by travel.
- An already established Chinese community in Australia of around 1.2million people
- Adelaide, Perth, Melbourne and Brisbane ranking in the top 10 most liveable cities in the world.³
“The transaction process here in Australia is also more beneficial than in China.” states Mr Song. “For example buying off the plan in China you pay 100% of the contract price. Buying off the plan in Australia you pay only 10%. It is harder to lose money”
With all this in view, it is no surprise that over the last 2 years, Chinese investors have become increasingly active in the Australian commercial market, the strongest demand being within the industrial and office sectors as well as for land, particularly in Melbourne. This all accounted for 9% of investment purchases compared with 1% in the previous decade.
The year of the tiger symbolises strength, wisdom and boldness; qualities that Chinese investors have clearly displayed in their tenacious desire for Australian commercial property over the last few years. This trajectory, especially with the holiday season imminent and travel restrictions eased, can be expected to continue with Chinese investors having the ideal opportunity to not only visit Australian family and friends but also pounce on deals to satisfy their unwavering appetite for commercial property and land in Australia.
References
https://www.abs.gov.au/statistics/people/population/population-projections-australia/2017-base-2066 ²
