In a surprising turn of events, Chinese homebuyer numbers in Brisbane are projected to increase by a substantial 30 percent in 2023 when compared to the previous year. Contrary to popular belief, recent research suggests that this surge is not the result of Chinese buyers driving up property prices in the city.
Daniel Ho, co-founder and group managing director of Juwai IQI, a leading Chinese property website group, shed light on this phenomenon. He highlighted that the research findings and pandemic-induced price hikes indicate that Chinese-based buyers are not solely responsible for the rising property prices across Brisbane.
This revelation is supported by a research paper authored by Song Shi and Xunpeng Shi, published in the Housing Studies journal. Their study delved into the impact of Chinese regulations limiting currency transactions on housing prices in Sydney. Surprisingly, the research found that Chinese buyers did not significantly affect housing affordability in Sydney, except in a few suburbs with a high concentration of Chinese residents.
Mr. Ho pointed out that although the Chinese buyer research was conducted in Sydney, it can reasonably be applied to Brisbane due to the notable surge in home prices in both cities during 2021 and 2022, a period when China's borders remained closed to international buyers. This is despite the fact that very few Chinese buyers were entering Queensland, suggesting that other factors, such as interstate migration, played a more significant role in driving up property prices.
Furthermore, Mr. Ho emphasized that today's Chinese buyers in Brisbane are markedly different from their 2019 counterparts, particularly in the wake of the COVID-19 pandemic. Many of these buyers are permanent residents or hold dual passports, leading them to seek larger properties such as apartments, townhouses, or single-family homes. The demand for small inner-city apartments has waned.
Juwai IQI's research also indicates that Australia has become the most sought-after destination for Chinese buyers in search of property. This surge is expected to continue over the next two years, as high-income Chinese households are projected to increase by a remarkable 50 percent. Australia has leapfrogged perennial favorites like Thailand and the United States in this regard, firmly establishing itself as the top choice for Chinese property investors.
The report by Juwai IQI attributes this trend to slower economic growth and property markets in China, prompting buyers to look overseas. Notably, China is adding more households to the upper-middle and high-income classes than any other country, with an estimated 71 million such households expected by 2025. Consequently, Chinese demand for Australian and other international real estate is expected to increase proportionally.
One key factor fueling this trend is the substantial savings held by Chinese buyers, with Chinese savings deposits rising significantly in value. In just the first nine months of 2022, these savings deposits increased by RMB 26.3 trillion ($5.28 trillion).
In conclusion, the real estate landscape in Brisbane is poised for a significant transformation in 2023, with a notable increase in Chinese homebuyers. Contrary to assumptions, these buyers are not solely responsible for rising property prices, and their preferences have evolved. As Australia continues to appeal to high-income Chinese households seeking investment opportunities, the property market is expected to see continued growth in the coming years.
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