QLD property market a magnet for Chinese investors

There’s great news for Queensland as the state has been identified as the next property buying hotspot for Chinese investors. And rightly so. Queensland is perceived as a much more affordable investment option right now compared to the likes of Sydney and Melbourne which are seeing property prices hit the roof and could actually start to see some of its own overseas Chinese investors flocking up the coast to the sunshine state instead.

According to Juwai.com’s Purchasing Intent Index for Q2, Chinese purchasing intent was up by a massive 35 per cent month-on-month and up 17 per cent on the same period one year ago.

The purpose of Juwai.com’s Purchasing Intent Index, is that it measures Chinese interest in a given location by tracking online property hunting activity on the portal. This acts as a go-between between Chinese property buyers and international property marketers.

So far this year, Queensland is performing well with Brisbane, the Gold Coast and Townsville all up in the first half of 2015. In fact, the Gold Coast is a serious magnet for Chinese investors with purchasing intent up an incredible 161 per cent on the first quarter, whilst it is up a massive 1,120 per cent on the same time last year.

It is forecasted by Juwai.com that the Gold Coast will continue to perform well and become an attractive place to visit and live, especially as the new direct flights from Wuhan to the Gold Coast is set to bring in an additional 35,000 travellers a year. This tourism is expected to generate approximately $53 million per annum which in turn will lead to an increase in real estate transactions.

As well as the Gold Coast performing well for Chinese overseas investors, Brisbane is also up 12 per cent compared to the same time last year, having peaked in the first quarter, whilst Townsville is also 4 per cent higher on last year and peaked during Q1.

According to Simon Henry, co-CEO of Juwai.com, “The Gold Coast is doing particularly well this year, especially as buyer interest temporarily reached a low point in 2014.”

He also added that, “Queensland cities have not been the most popular with Chinese buyers over the past five years, but they are growing quickly”.

Within Australia, Juwai.com partners exclusively with Ray White, LJ Hooker, Raine and Horne and Re/Max and is the Chinese partner.

As well as Queensland being more attractive in price, it also has the lifestyle factors and warmer, tropical climate that appeals to many Chinese investors.

It is interesting to note though that the attitude of Chinese investors has changed over the years. Today, the average Chinese investor is more accustomed with the Australian property market and might have already invested in property in Australia or overseas, whilst they are more familiar with the country and speak the language. Previously, these investors typically were first-time buyers with little experience in investing in overseas markets.

The exchange rate has also helped and motivated Chinese investors to invest in Aussie real estate with the Aussie dollar weakening meaning that Chinese investors can get more for their money.

Simon Henry also stated that if Australia was to continue to attract billions of dollars of international investment, it needed to focus on four key areas.
  1. Invest in infrastructure (including increase number of direct flights from China)
  2. Maintain and improve the quality and reputation of its educational system
  3. Invest in protecting high quality of life
  4. Regulate foreign visitors and investors with fairness and transparency
Queensland is expected to grow in the next couple of years as it moves into the recovery phase of the property cycle. Property prices are starting to rise and there are a number of new developments and construction work occurring, even though there is still a huge demand for residential property.

Chinese investors will do well to get in as soon as possible to make the most of this rising market before a boom occurs pushing prices sky high.
Published on 3rd of August 2015 by Marty Stanowich
Marty Stanowich
Marty Stanowich

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