Chinese rush for Australia's homes is here to stay
Ausin Group (Finance), a company that offers property and mortgage broking in Australia to Chinese buyers, expects to sell two-thirds more homes and to double the amount of loans it arranges for buyers as demand from mainland China surges.
The company forecasts $1.5 billion in sales of new residential properties in the year ending June 30, compared with $900 million over the previous 12 months, said Ausin's Sydney-based managing director, Joseph Zaja. The value of mortgages the company arranges through Australian banks is expected to climb to $500 million in the 2015 calendar year, he said.
Ausin is benefiting from surging demand from China, where the housing market is faltering. Chinese purchasers overtook Americans to become the biggest buyers of real estate in Australia in the 12 months through June 2013, plowing $5.9 billion into commercial and residential property, a 42 per cent increase from the previous 12 months.
"I don't see the trend slowing down," Zaja said. "It's here to stay."
Ausin sources projects from local developers, including Stockland and Mirvac, marketing them through its 11 offices in China, Zaja said. The average price of the properties Chinese buy in Australia is $630,000 according to the company.
When Zaja and a partner based on the mainland, whom he declined to identify, first set up Ausin in 2009, banks would only finance developments where less than 30 per cent was sold to overseas buyers, he said.
"Now, that's up to 100 per cent in some cases," he said. "The larger banks had the view that overseas buyers were a much higher risk than local buyers. But we've been able to provide them with statistics that less than 1.5 per cent of all our purchasers cannot complete" their purchases.
Ausin last year began operating as a mortgage broker, and now arranges home loans through local banks for about 93 per cent of its buyers, Zaja said. The average borrowing is 70 per cent of a property's value, or about $440,000.
The company, which also offers immigration services to Chinese wanting to move to Australia, is setting up a fund targeting those from the mainland applying for a Significant Investor Visa, Zaja said. The visa allows foreigners investing at least $5 million in Australia to qualify for residency. Chinese nationals accounted for 91 per cent of applications and 86 per cent of grantees as of the end of June, according to the office of the assistant minister for immigration and border protection.
Ausin has seen a 300 per cent increase in demand for its immigration services over the past six months, the company said in a release last week.
Overseas purchasers bought 10.2 per cent of new properties in the quarter ended June 30, falling from a record 13.9 per cent over the first three months of the year, according to surveys of real estate professionals by National Australia Bank. They accounted for 7.2 per cent of purchases of existing properties, compared with 9.5 per cent earlier.
You can pop the tin foil hat on your head and go back to sleep now.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness. "Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
Exactly as I predicted, the market is transmuting away from locals owning a house, and yet prices have not corrected and continue on a up cycle.
On target again.
The Chinese homegrown housing market started declining in the first quarter, you article seems to confirm this , in that foreign sales of new homes was 40% more in the first quarter than in the second.
I work in an international real estate/finance firm, and I deal with the Chinese on a day to day basis. 12-18 months ago these groups were almost non-existent, however now make up around 30% of my departments revenue.
Speaking with companies similar to Ausin Group and the like, the word on the ground in China is that Australian property is dramatically overpriced, and is highly likely to fall in the next 12-36 months. However they are not concerned about this, as their main priority is getting their wealth out of China. Even if Aussie property prices halved, which is realistic, $1m of real wealth in AUD value is better than $2m of Yuan that can be taken from you at any point in time right?
I suspect most of the money flowing into Sydney and Australia is corrupt, and as the government there is starting to take a strong interest in outgoing funds from China I don't believe the question is if this will stop, but when. I have already had two recent transactions put on hold due to the HSBC/PBOC issue.
I work in an international real estate/finance firm, and I deal with the Chinese on a day to day basis. 12-18 months ago these groups were almost non-existent, however now make up around 30% of my departments revenue.
Speaking with companies similar to Ausin Group and the like, the word on the ground in China is that Australian property is dramatically overpriced, and is highly likely to fall in the next 12-36 months. However they are not concerned about this, as their main priority is getting their wealth out of China. Even if Aussie property prices halved, which is realistic, $1m of real wealth in AUD value is better than $2m of Yuan that can be taken from you at any point in time right?
I suspect most of the money flowing into Sydney and Australia is corrupt, and as the government there is starting to take a strong interest in outgoing funds from China I don't believe the question is if this will stop, but when. I have already had two recent transactions put on hold due to the HSBC/PBOC issue.
The house of cards is starting to get wobbly...
Assuming we are talking about Chinese nationals with their income derived from China, who is doing the finance for these transactions?
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