5 insights into Chinese investment in Australia

China is now the biggest economy in the world, with a GDP of 9.24 trillion USD. With 20 million births each year, China gains the entire population of Australia year on year. It’s no wonder China is making waves when it comes to international property investment.

CPS Property Director, Jacob O’Neill, recently attended a three-day property expo in Shanghai to field interest in Australia from Chinese investors and learn more about this unique international market.

The expo was a great opportunity to network with over 50 other property companies from all over the world including China, the Middle East, South East Asia and more.

Here are Jacob’s main takeaways from the trip.

There is strong investor interest in the Australian market

Australia is a triple A rated, attractive economy for Chinese investors.

While much is said in Australia about rising property prices (especially in Sydney and Melbourne), property is even more expensive in Shanghai and Hong Kong.

Chinese investors are looking for more affordable options with strong capital growth expectations in international markets.

Canada leads the charge as an investment target, closely followed by Australia.

There is a larger appetite for risk

Chinese investors are less deterred by investment risks. Whereas in Australia investors are far more conservative, looking for stable and secure investments, the appetite for risk in China is much stronger.

Chinese investors are also very self-driven. They are less likely to invest in financial planners or advisors and rely on the recommendations of trusted friends and peers.

China Expo

Foreign exchange rates play a role

With the Australian dollar falling against the Yuan, there is a big opportunity for Chinese investors to invest affordably in Australia.

In addition to this, Chinese investors frequently invest in capital markets – knowing an investment in Australian or other international capital now can mean a big return later.

Immigration is closely tied to property investment

Unlike much of the media hype around foreign investment would suggest, most Chinese investors are investing in Australia with the hope of also immigrating.

Property investment is usually considered a part of a holistic immigration package and can provide gateways to immigration, so long as investors are investing in new properties.

Many Chinese people, especially the younger generation in their 20s and 30s, are looking to leave the country to find more affordable housing, better education and to avoid the changing tax situation in China which has made life more expensive.

Chinese property investment preferences are different from Australian preferences Chinese property investors typically look for different characteristics in a property than Australian investors.

They are often less concerned about the location and more about the potential for capital growth. They may also be mindful of feng shui elements, for example they may not like angular properties and may prefer a clear and open flow to the front door.

Interested to learn more about Chinese investors? Contact CPS Property.

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