CHINESE UNFAIRLY TARGETED IN PROPERTY HYSTERIA
Written on the 11 August 2015 by Andrew Bell
FOREIGN investment: it's a hot topic in Australia, and with good reason. On the Gold Coast, we're receiving enormous enquiry from overseas buyers and in particular the Chinese. They see the city as a safe place to invest and view the Gold Coast as the nation's premier lifestyle destination.
There are a couple of factors driving their interest firstly the increasing number of Chinese visiting the Coast for leisure and deciding to invest, and secondly a few major Chinese investors who have prompted others to take notice of the city (such as Wang Jianlin, whose investment in the city amounts to well over a billon dollars). As a major Chinese investor said to me recently, "where the big fish go, the little fish follow".
These investors buy in FIRB-approved new developments and are not permitted to buy established property outside Integrated Tourism Resorts such as Sanctuary Cove or Hope Island Resort.
As well as Chinese nationals investing here, there is an increasing number of Chinese who are nationalised Australians buying property on the Gold Coast. They're turning away from capital cities like Sydney and Melbourne in favour of the Coast's lifestyle attributes and tend to buy suburban homes.
At times, people confuse Chinese-born Australian nationals with Chinese nationals who they believe are flouting foreign investment laws and buying established property. The concern is that in doing so, they are competing with local buyers and pushing up property values. Media reports of late, usually regarding Sydney and Melbourne markets, have fuelled this hysteria.
Some people have shown exasperation at the fact they have lost out at auction to Asian buyers. The distinction they are failing to draw and an important one at that - is that while these buyers may be of Asian appearance, they have Australian citizenship, and therefore have the right to buy established homes here.
While I can't comment with certainty on what's happening in Sydney and Melbourne, there is no evidence here on the Gold Coast that any illegal foreign investment is occurring. In the past year Ray White Surfers Paradise has sold 330 properties to investors based in Asia more than any other agency on the Coast. This has been exclusively in FIRB-approved developments.
Foreign investment in local residential projects is playing an increasingly important role for developers as these buyers make up an important segment of the market. For any development to be a sales success, there needs to be a mix of buyers from local, national and international markets. It's just not feasible for developers to proceed with a development without a broad target demographic.
As new projects come to fruition there will be more properties available to local and foreign buyers and this actually has the effect of keeping prices in check, rather than pushing them up.
Overseas investment on the Gold Coast is playing an important and responsible role in growing the development industry, creating jobs, and supporting our local economy, and for this reason it should be embraced.
Author: Andrew Bell
About: Andrew Bell is the CEO of the Ray White Surfers Paradise Group