Chinese Buyers Boost Australian Real Estate Market with Surging Cash Investments

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Australia has become the preferred destination for wealthy Chinese homebuyers, a trend that is expected to escalate in the next two years, according to a report by Juwai IQI. Meanwhile, Sydney’s high-end real estate market is enjoying a boost from cash-rich international buyers and domestic investors, in spite of rising interest rates that are affecting the general market.

Juwai IQI’s report indicates that Australia overtook Thailand and the USA to top the list of property destinations for Chinese buyers, drawing the highest number of cross-border buyer enquiries out of China this year through June. This surge in interest is attributable to the growing wealth among Chinese households, despite China’s slower economic growth in 2023. This wealth is expected to fuel the demand for international real estate. “Even with China’s slower economic growth in 2023, the country is adding more households to the upper-middle and high-income classes than any other. Logically, Chinese demand for international real estate will also increase proportionately,” said Juwai IQI co-founder and group CEO Kashif Ansari, as reported by Sophie Foster.

The story is similar in Sydney’s real estate market, where the high-end sector is experiencing a lift from cash buyers, particularly international ones. Sydney-based Monika Tu, founder and principal of Black Diamondz, a luxury property brokerage, states that approximately 70% of her deals are cash. She observed that the demand for homes valued at A$25 million and up is very active. “Many buyers are coming from China, Hong Kong, Singapore and Vietnam. What’s happening internationally is overwhelming, there’s so much uncertainty, but Australia is still favoured with South East Asian and Chinese buyers because it’s a relatively stable market. And when we compare square meters of prestige property we’re so much cheaper,” Tu told Kirsten Craze.

The unique resilience of Australia’s luxury property market is also attributed to the relatively high proportion of cash buyers and the low supply of luxury property, according to Erin van Tuil, Knight Frank Australia’s head of residential. “In our Wealth Report we said 49% of prime market buyers internationally were cash purchasers. In Australia, we think that’s probably closer to 60% according to our research,” Van Tuil explained.

Interestingly, not all the cash investment is foreign. Domestic investors, particularly in Sydney, who have benefitted from the local real estate boom, are also significantly contributing to the trend. Gavin Rubinstein, director of real estate agency TRG, said: “My view is the market has been fuelling the market. One client gets a big price for their house, then they take that cash and buy the next house.”

Taken together, these trends paint a vibrant picture for Australia’s real estate market, particularly in the luxury sector, as it continues to attract both international and domestic cash-rich buyers.

References:

Sophie Foster, “Australia now top destination for cashed-up Chinese homebuyers” https://www.realestate.com.au/news/australia-now-top-destination-for-cashed-up-chinese-homebuyers/ 

Kirsten Craze, “International Buyers and Cash Deals Are Boosting Sydney’s Real Estate Market” https://www.mansionglobal.com/articles/international-buyers-and-cash-deals-are-boosting-sydneys-real-estate-market-bebb428a