Chinese not overpaying for property: report

There’s little evidence that Chinese buyers pay more than other buyers for real estate in Sydney, according to a new study.

The University of Technology report, Chinese Demand for Sydney Residential Property, which analysed 74,000 individual home sales over a 10-year period showed that Chinese buyers paid two per cent less than other buyers on average over the decade, even after taking into account characteristics such as housing quality, suburb and date of purchase.

That represents a saving of $13,800 on the average price of $676,300 for the properties in the study.

The research also revealed a significant increase in the proportion of sales to Chinese buyers over the decade, with 6.5 per cent of sales to Chinese buyers in 2000 increasing to 13 per cent in 2010, which dropped to 10 per cent in 2011.

The study found no evidence that Chinese buyers, who are said to drive the hardest bargains when it comes to property purchases, pay more than other buyers when sampling by year, or after separating the sample into Chinese versus non-Chinese populated suburbs and prestige versus non-prestige suburbs.

Researcher at the University of Technology Lorenzo Casa­vecchia, who has sent his findings to a parliamentary inquiry, said the implication of the findings is that Chinese buyers, on average, do not seem to overpay for houses, as some commentary suggests.

“On the contrary, we find evidence that Chinese buyers pay less than other buyers for similar-quality homes,” said the report.  

Researchers said they plan to conduct a more comprehensive study using the full sample of all Sydney home sales from 2000 to 2013, which will provide better insights into the overall size of the discount paid by Chinese buyers.

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