Overseas investors are single-handedly driving the Melbourne property market, according to agents.
Last month Jellis Craig agent Peter Vigano sold a two bedroom house to a Chinese investor for more than $100,000 over the reserve price of $780,000.
“When you’ve got the overseas money coming in, especially from the Chinese who can borrow money from their government at 1 per cent, [Australian buyers] can’t compete,” Mr Vigano told The Australian Financial Review.
The agency has even hired several Mandarin-speaking agents to manage the upswing in buyeJellisr interest from Asian investors.
Mr Vigano said foreign investment was thriving in surrounding Melbourne areas like Camberwell, Canturbury, Hawthorn, and Kew.
The influx of foreign investors from Asia comes as no surprise given the recent lending surge in China.
Chinese banks expended a record 9.6 trillion yuan ($1.5 trillion) in new loans last year, according to a report on ABC News.
Real Estate Institute of Victoria (REIV) chief executive Enzo Raimondo said immigration, as well as supply, were key contributors to the Melbourne foreign investment surge.
According to REIV figures, the median house price in Melbourne jumped by 15 per cent from $400,000 in the September 2009 quarter to $540,500 in the December quarter.
“The issue for 2010 is going to be one of supply and affordability,” Mr Raimondo said.