With the arrival of Chinese New Year bringing a fresh surge of visitors to Australia on property-buying sprees, all indications are that 2017 is shaping up as a relatively strong year for the real estate market.
While there may be some softening of prices growth, experts agree that the numbers of Asian buyers considering purchasing in Sydney at the start of the Year of the Rooster is a good sign, giving home-owners good reason to crow.
“2017 is looking quite promising,” says David Chatterjee, director at Lucror Property which advises foreign buyers and carries out direct marketing into China. “Australia was always the second preference as a buying destination behind the US but now, since Trump, Australia has become No. 1.
“The numbers of inquiries are rising by about 25 per cent every day. Sydney is very popular, but the main hurdle is affordability.”
That’s particularly difficult at a time when restrictions on Chinese capital leaving the country are biting, as well as higher rates of tax on overseas buyers. Those factors are tending to delay final buying decisions, says Monika Tu, director of Sydney agency Black Diamondz, who has just returned from running a month-long roadshow of Australian property in China.
“We know we’re going to be busy from now until at least February 15 as that’s how long the Chinese New Year celebrations go on,” she says.
“I’m not sure 2017 is going to be quite as busy as last year, because it is harder to send over the money, and investment is very slow, and people are taking longer to make decisions. But the big attraction is still our stable economy and regular returns.”
Domain chief economist Dr Andrew Wilson says it’s still early days and we won’t have any concrete indications of the state of the market until auctions ramp up on February 28. So far, the number of auctions at around 50 this weekend, rising to 150 next, are pretty much the same as this time last year.
“We saw the market ease slightly in December with clearance rates the lowest of spring, slightly below 70 per cent, but listing numbers picked up, so we did see a bit of a resurgence compared with the year before,” he says. “Typically, the market starts how it finished previously.”
While the more stringent financial considerations may affect Chinese buyers, Dr Wilson believes they still feel a very strong cultural connection to Sydney which will mean there will be no significant impact on spending.
A survey released earlier this week from juwai.com – the international property website for Chinese buyers – found nearly half the Chinese consumers planning to travel internationally during Chinese New Year also plan to look for property to buy at their destination. Juwai.com CEO Charles Pittar said most agents expected this year to be even busier during the holiday than last year.
Esther Yong, managing director of Chinese portals Sodichan and co-founder of ACproperty, predicts more Asian buying activity after the new year. “We’re finding it a little bit quieter than the past couple of years because of the new rules, and most of our buyers are asking us about finances first. But I think it’s just making their buying decisions slower.”
Those kind of considerations could well dampen the influence of Chinese buyers, but the market is likely to continue to be strong with or without them, according to Shayne Harris, director of residential at Savills International. “The market will continue much as it was last year, although prices will be stock-dependent.
“The lower north shore and mid-north shore will both do well, and the inner west and inner east. And if there’s still a shortage of stock … price growth is anyone’s guess!”
What’s hot this Chinese new year?
1.
Property close to good private schools. “Certainly that’s the No. 1 priority for many buyers,” says Black Diamondz’ Monika Tu. “A good education is very important, and the upper north shore is always popular for that reason.”
2.
New apartments for sale off the plan, particularly close to transport and shops, says Esther Yong. “Investors tend to prefer one-bedroom apartments or ones with a study, as a low entry point into the market,” she says.
3.
CBD new apartments are still going to be most in demand, says Shayne Harris of Savills International. “Proximity to the CBD is very important, and that means the city or lower north shore.”
4.
A good price point for many Chinese investors is around $700,000, believes Lucror Property’s David Chatterjee, particularly with the difficulty in borrowing funds and sending them overseas.
5.
Homes on the waterfront or with some kind of water views. “That kind of lifestyle factor is increasingly important to people,” says Ms Tu.
6.
Many Chinese buyers are now starting to look at house-and-land packages, particularly around areas like Kellyville, says Ms Yong.
7.
University precincts are also in favour, says Mr Harris. “Units around Macquarie Park have done exceptionally well, and also Ryde.”
Article by: www.domain.com.au (Sue Williams)
https://www.domain.com.au/news/chinese-new-year-brings-surge-to-australian-property-market-20170126-gtxdlb/