China’s hunger for overseas real estate is pushing Australian home prices to record levels as the wealthy Chinese look for alternatives to increasingly unstable markets at home.
According to a recent report from property information provider RP Data and Rismark, housing prices in Sydney and Melbourne have gone up more than one third in the last 12 months, with Sydney’s median home price reaching A$824,000 (US$763,000) and Melbourne hitting A$697,000 (US$645,000).
For folks looking for cheaper alternatives, Brisbane looks positively affordable at a median home price of just A$509,000 (US$471,000).
Chinese Buyers Still See Australia as Cheap
According to a report released in March by Credit Suisse, 12 percent of all new housing purchases and up to 18 percent in Sydney and 14 per cent in Melbourne are by Chinese buyers.
The bank expects Chinese buyers to purchase US$39.54 billion worth of Australian residential property over the next seven years. According to the report, Chinese buyers comprise an estimated $5bn worth of property purchases in Australia per annum.
Compared to pricing in China’s major cities, where prices have risen rapidly in the past decade, many Chinese consumers see Australian property as a bargain. The current slowdown in the domestic real estate market also has many wealthy Chinese consumers scrambling for an alternative destination for their cash.
Developers Also Building an Australian Presence
While Chinese consumers have been enthusiastic about Australian real estate, the country’s property developers have also been quick to acquire projects down under.
Shanghai’s Greenland Group has now acquired four development sites in Australia, with one Sydney project already pre-selling. In February this year, Guangzhou-based developer Country Garden purchased a development site in Sydney for AU$73 million (US$65.76 million).