It is no secret that investors from China are highly active in Australia but this week it was revealed the extraordinary extent to which they are driving the market.
Queensland records overseas investment in property through the Foreign Ownership of Land Register which was released for the 2014/15 financial year this week.
It is the only state to do this so its record provides one of the few windows into what is happening nationwide.
The register shows that investment from China in Queensland property increased from $323 million in 2012/13 to $463 million in 2013/14 and then to $872 million in 2014/15.
This represents a 170 per cent increase in just two years.
Chinese investment is now as great as that of the next five sources combined. The top four countries overall are China, Singapore, USA and Hong Kong.
The British – Queensland’s largest foreign property holders due to their historical investment – spent only $119 million.
Singaporean investors spent $421 million last financial year — nearly three times more than the year before which is an even sharper rise than China.
When it is considered that Hong Kong is actually a part of China, and that Singapore is largely ethnically Chinese, the central role of Chinese investment to the Australian market cannot be overstated.
Despite this recent dominance, the Chinese are not yet the biggest foreign holders of Australian land.
When considered by land area, they are comparative minnows, with the UK, USA, Switzerland, Netherlands, Germany all holding more land.
Chinese-buyer-focused real estate portal Juwai.com co-chief executive Andrew Taylor told The Courier-Mail newspaper the Chinese still had a relatively minor allocation towards Australia given their aggregate wealth.
“Even investors from Switzerland own more land in Queensland than do Chinese,” he said.
“China’s stock of foreign assets is still small, given the size of its economy, and that’s one reason you can expect large annual Chinese purchases to continue for many years.”
Juwai.com co-CEO Andrew Taylor[/caption]The small land area owned by Chinese investors reflects the fact that they do not own a great deal of large rural properties and still require FIRB approval to buy them. Instead, they tend to invest more in urban areas.
The foreign ownership register shows that only 3.4 per cent of Queensland’s available land, or 5.8 million hectares, is tied up with foreign interests, up from 3.2 per cent in 2013-14.
Of that, 2.2 million hectares are owned by UK interests and 548,000ha by the US.
China’s investment in the Brisbane City Council area was $382 million, with $372 million pouring into the Gold Coast.
Wanda Group's Jewel proposed highrise on the Gold Coast.[/caption]Analyst Michael Matusik told The Australian he estimates Chinese buyers are buying more than half the new apartments being sold off the plan in major developments in Brisbane and the Gold Coast.
“There is an increasing number of Chinese buyers — some of it is capital flight, some is the expectation of living here one day in the future.’’ Forise Group's proposed Surfers Paradise tower.[/caption]He said that Chinese buyers still preferred to buy houses or apartments in Sydney or Melbourne. The new figures come as an increasing number of Australian developers enter joint ventures or other arrangements to gain access to Chinese investors.
This week, Coast-based developer Villa World announced it had formed a joint venture with China-focused property marketing company Ausin Group to deliver a residential community in Rochedale, on Brisbane’s southside.
Ausin Group recently added Brisbane to its 12 other capital city offices in Australia and Asia.
Villa World had previously purchased a number of land parcels in Rochedale to form an 8.7 hectare site which it planned to develop as a land-only offering but as part of its joint venture arrangement with Ausin it will instead build the 148 homes planned for the site.