Thursday, 21 March 2013

NEW laws in Australia and overseas may potentially boost local housing markets with Chinese

NEW laws in Australia and overseas may potentially boost local housing markets, with Chinese investors given more incentive to look down under for their next property purchase.

This month, the Chinese government announced a proposal to step up the enforcement of capital gains tax on home sale profits and also to increase deposit sizes for those buying second properties.

       Squeezed Asian buyers look abroad

Rounds of property cooling measures in Hong Kong, mainland China and Singapore in recent months are persuading buyers to invest in overseas properties, especially the UK, the South China Morning Post reports.
According to Colliers International, compared to the same period in 2012, there was a 20% increase in inquiries from Hong Kong and Singapore from January to early March while transactions rose at a similar pace as well.
Student apartments in London, priced as low as £43,000, are now also being offered in China and Hong Kong to cater for smaller investors and capture the growing appetite among overseas investors.
Read more on (“Squeezed Asian buyers look abroad”, 13 March 2013).

“Turning the screws on property speculation appears to be aimed at limiting a potential asset bubble in China,” said Angus Raine, CEO of Raine & Horne.

”The upshot is that Chinese nationals could look to foreign property markets, which will surely mean more money flowing into Australian real estate.”
Chinese investors have shown interest in the Sydney and Melbourne property markets for some time and this was highlighted by the rush of purchases made during the relaxation of foreign investment laws in the aftermath of the GFC.
Now, with the recent introduction in Australia of the ‘Significant Investor Visa’, which allows migrant visas to be fast tracked if they pour more than $5 million into approved local investments, another ‘perfect storm’ scenario has been created. A number of Sydney markets are already reporting increased inquiries.
“We have received significant interest from Chinese buyers,” said Barry Goldman of Raine and Horne Double Bay.
“The laws will surely mean more money finding its way into the eastern suburbs.”
Meanwhile, agents in areas traditionally popular with Chinese buyers, such as the prestigious north shore, expect the flood gates to open even further.
“Around 30 per cent of our Chinese buyers are overseas investors, so we expect that any restrictions on real estate in China will flow through to our markets,” said Hugh Macfarlan of Raine and Horne Chatswood.