Australian Assets Are Being Bought Up By The Wealthy Chinese, Here’s Why

From housing to ports to agriculture, Chinese investors are buying up assets very fast in Australia.
From $300 million to more than $1 billion over the past year, Chinese investment in Australia’s agricultural sector has been very significant and this is one area where that trend is particular noticeable.
Australia is being looked at as a fertile ground to produce goods that they’ll sell back in China and this is part of what’s driving that trend among a large number of Chinese investors. Australian-produced fruits, meats, wine, dairy and minerals are the items that are witnessing heavy demand from China’s booming middle class.
In fact, “Made in Australia” term that those shoppers have grown to trust on the whole. Australian-produced formula has been a market winner for Chinese consumers after outbreaks in China from tainted infant formula.
One the other hand, the Australian housing sector is also being impacted significantly by the China’s wealthy.
According CoreLogic, a data, information, analytics and services provider in Australia says that since the global financial crisis, there has been a rise of 98 percent98 percent in the home prices in Sydney while those in in Melbourne has seen an 84 percent rise in prices.
Increased Chinese activity in the market in addition to rising prices. According to Juwai.com, an international property website, the biggest year for Chinese investment in Australian residential real estate the biggest year for Chinese investment in Australian residential real estate was last year.
According to a recent report by Credit Suisse, a quarter of new property supply was acquired by foreign buyers – 87 percent of whom were Chinese, in New South Wales, the Australian state in which Sydney is located.
However, this trend has not made everyone happy.
The movement of Chinese money into Australian assets is being attempted to be slowed by governments – both federal and local.
While the state of New South Wales doubled taxes on foreign buyers to 8 percent of the purchase price, the Australia federal government has lowered incentives for foreign buyers. restrictions on the outflow of cash from the mainland have been implemented by the Chinese government for its part.
“China’s capital controls have worked,” Jane Lu, head of Australia for Juwai said. “Look at China’s huge foreign reserves, at the strong yuan, and at the reduced the flow of money out of the country.”
According to Lu, an average Chinese property buying inquiry price of about $350,000 in Australia an average Chinese property buying inquiry price of about $350,000 in Australia is being seen by Juwai in 2017. She said that it is about $40,000 lower than last year.
Yet, demand is not expected to slow as the demand for Australian properties is still high according to Credit Suisse. China’s increasingly wealthy population is one of the major reasons for this steadiness in demand.
nearly equal to the value of Australia’s total housing stock nearly equal to the value of Australia’s total housing stock was the combined wealth of all of China’s millionaires as calculated in 2011. And within a span of just a few years, China’s wealthy are worth twice as much as the housing stock at the current rates.
It has been predicted that the combined wealth of the China’s elite will continue to grow at a faster pace according to a Credit Suisse forecast.
(Adapted from CNBC)

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Categories: Economy & Finance, Regulations & Legal, Strategy

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