|Chinese property buyers set to pour US$39b into Australian assets
Wealthy Chinese will pour A$44 billion (US$39.4 billion) into Australian real estate over the next seven years, potentially pushing prices even higher, a study has fund.
Swiss investment bank Credit Suisse used data from the Foreign Investment Review Board and other government agencies to estimate the amount of Chinese investment in Australian residential property at more than A$5 billion a year.
“They purchased $24 billion of Australian housing over the past seven years; we forecast they will purchase $44 billion over the next seven, to 2020,'' it said.
The ranks of those who could afford Australian real estate will swell beyond the current 1.1 million people, with implications for Australian home-buyers, the bank said.
“While Australia has some of the most unaffordable housing in the world, further strong Chinese demand can push prices even higher,'' it said.
“A generation of Australians is being priced out of the property market. Many face a lifetime of renting.''
Australia has one of the most expensive real estate markets in the world on a house price to income ratio, while average house prices in Sydney and Melbourne have risen by more than 30 percent since the global financial crisis.
The Credit Suisse report found that Chinese buyers – some of whom are restricted to buying only new homes – bought 12 percent of new housing nationally per annum, an amount considered insufficient to drive prices up across Australia.
But because they are mainly buying in the east coast cities of Sydney and Melbourne – where they are acquiring 18 percent and 14 percent of new supply – they were a much more powerful force in these markets, the report said.