Truth about Chinese investment property buyers
It’s time someone helped to get rid of the myths behind the Chinese buying ALL our investment property and have a look at the truth about Chinese investment property buyers.
The idea of Australian residential housing being bought up by foreign owners, particularly the Chinese, just does not stack up. Sure, we go to auctions and it would appear that most of the people attending the auction are Asian but this surly should be of no surprise as, according to our last census in 2011, 2.4 million Australians are of Asian background! That’s 12 % of our population, more than double the number of indigenous Australians.
12% of all Australians are of Asian background. The Asian community are prolific property investors
The vast majority of ‘Chinese” buyers in our market are Asian Australians. It’s always good to have a scapegoat, it seems it makes us feel better when things don’t go our way and after years of price growth, people priced out of the market are using overseas-based Chinese buyers as the scapegoats responsible for our housing affordability.
The media doesn’t help this perception. “Chinese” buyers over other ethnic groups such as Indian, French or Canadian have fuelled public concern over whether these buyers are inching the Australian dream further out of reach. The generalisation of the term “Chinese buyers”, to include anyone of Asian appearance or with an Asian surname, has placed local and international buyers in the same basket, and exaggerated the extent of Chinese interest.
So what are the major myths about Chinese buyers pushing prices up by buying investment property? What is the truth about Chinese investment property buyers?
Here are six of the most common misconceptions:
1. Overseas Chinese investors are pricing Australian first home buyers out of the market
Not True – Offshore Chinese investors and first home buyers generally don’t compete for the same properties.
2. Chinese buyers with endless financial means are bringing suitcases full of money
Not True – The majority of average buyers are looking at properties priced between $500,000 to $800,000.
3. Chinese buyers tend to overpay on properties
Not True – Chinese buyers like to negotiate, and some agents would even say they’re savvy buyers. Sure, they’ll pay a premium if they think it’s worth it, or it has unique features. But so would local buyers.
4. Chinese buyers aren’t concerned about dwelling size
Not True – Chinese buyers are not looking for micro apartments and in a survey they said they do not want to buy a property investment under 50 square metres although they may start off with a smaller investment property because it’s more affordable.
5. Chinese investors leave apartments and houses empty because they’re not chasing rental return.
Not true. Again, the majority surveyed wanted yields of around 5% if possible.
6. Most Chinese buyers shun properties with a street number 4, and the right number play a big part in their decision making
It’s true that the number eight is linked to good fortune and the number 4 is seen as unlucky but the sale price will more likely depend on the property, particularly for younger Chinese buyers.
For full details on this story go to: http://goo.gl/AarvP7
