Proposed restraints on real estate ownership in China could be great news for the Australian property market, according to the head of one major group.
Last week, the Chinese government announced a series of proposed restraints including stricter enforcement of capital gains tax on home sale profits and the imposition of higher deposits for the purchase of second homes.
“Turning the screws on property speculation appears to be aimed at limiting a potential asset bubble in China,” said Angus Raine, CEO Raine & Horne.
“The upshot is that cashed up Chinese nationals could look to foreign property markets, which will surely mean more money flowing into Australian real estate in capital cities such as Sydney.”
Barry Goldman, co-principal of Raine & Horne Double Bay and Bondi Beach claimed his area is expecting further interest from international investors.
“We’ve had a few wins in recent times with the Significant Investor Visa, and combined with the Chinese government’s restrictions, this will surely mean more money finding its way into the eastern suburbs housing market,” he said.
“In fact, we’ve already received significant interest from Chinese buyers,” he said, referring to one particular Bellevue Hill property.
“This luxurious near-new residence … has attracted plenty of enquiry from Chinese buyers, with one offer already on the table.
“It ticks all the boxes with Chinese buyers and investors including Harbour views, excellent build quality and close proximity to schools,” added Mr Goldman.
It’s also expected that legislative changes in China will flow through to the prestigious North Shore real estate market.
Dick Crampton from Shead Property in Sydney’s North Shore claims international buyers come in waves.
“Right now I wouldn’t consider us to be experiencing one of the ‘waves’,” he told Real Estate Business. “I’m not sure what generates it, but they come every six months or so.
“The last spike was the middle of last year because Mirvac Tower was completed, and it was heavily advertised in Asian countries like Korea and mainland China.”
However, Mr Crampton claims Chinese investors aren’t just about profits.
“These new changes might increase international activity a little, but we often find Chinese investors don’t invest in Australia for the profit and returns," he said.
“They see Australia as a safe haven and an easy way to secure their funds.
“We’ve had one Chinese investor purchase a property and left it untenanted and empty for long periods of time, especially when there were rumours the Chinese government would be taking money from the high earners.”