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China’s real estate sector is in a tailspin, and the impacts are being felt beyond the nation’s shores, including in Australia.
Sydney architecture firm Place Studio reports that a number of Australian apartment projects have been left in limbo due to uncertainty over financial commitments from Chinese firms.
Australia’s Foreign Investment Review Board also reported that Chinese investment into Australian residential real estate dropped by $400 million, from $1.1 billion to $700 million, in the September 2023 quarter. At the same time, approvals from Chinese buyers fell from 826 to 523, though they still remain the most active foreign cohort in Australian property, followed by investors from India and Vietnam.
Nonetheless, Place Studio’s CEO and co-founder James Alexander-Hatziplis said that the prominence of Chinese investors in the Australian market could soon change, particularly as other foreign investors seize on some of the long-term opportunities that Australia presents.
In particular he noted that some of the drop-off in investment from Chinese entities has been taken up by those hailing from the Middle East, specifically the United Arab Emirates.
He credits a bilateral trade agreement, which commenced in December 2023, for giving entities from both nations a greater sense of stability in cross-cultural partnerships, though he said that Emirate interest in Australian investments is hardly new.
“They have been here for decades with respect to horse racing and stud properties. That is now expanding to include other commercial and residential developments.”
In his view, Australia stands greatly to gain from this development interest, particularly if the approaches to building pioneered in the Middle Eastern nation can be tailored to fit some of Australia’s specific needs.
“There is also the opportunity for these significant and substantial investors to develop whole new regional centres, just as they have done in their home countries,” Alexander-Hatziplis said.
“Besides pushing for affordable housing in our existing cities, we should also be looking at developing whole new centres. Australia needs to develop more cities in regional areas to reduce the pressures on existing major metropolises and to enable more Australians to get into their own home,” he added.
The architect pointed to regional transformations such as the one taking place in western Sydney as a model for potential growth.
“New regional cities could help provide more affordable housing, reduced commuting times and improved quality of life. Each new city needs to be centred around a specialist employment offering,” he explained.
“For example, the development of Western Sydney International Airport is attracting a range of businesses that will create an employment hub that will in turn lead to residential developments nearby. This can be replicated elsewhere.”
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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