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Australia’s recent free trade agreement with China is forecast to boost Chinese investment in local real estate – and increase prices.
One Investment Group executive director Justin Epstein said Australia is viewed by foreign investors as a safe haven, given its economic stability and transparent regulatory environment.
“In the past year, there has been significant buying activity among Asian investors interested in securing Australian residential land banks, hotels, office buildings and agricultural landholdings, and we expect this to grow substantially now that the agreement is in place,” Mr Epstein said.
“Chinese developers, for instance, have snapped up development sites in major Australian cities, such as Melbourne, worth billions of dollars,” he said.
Mr Epstein said the falling Australian dollar is making local property assets cheaper and more attractive to foreign investors seeking a stable market to invest their capital.
“This buying spree isn’t expected to slow, and competition for quality assets between local and Chinese buyers will likely push up prices for in-demand locations in 2015,” he said.
One Investment Group claims it is working on numerous foreign client transactions worth more than $1 billion.
“Given the measures that the Chinese government has taken to put the brakes on property speculation at home, the free trade agreement opens more doors for Chinese investors eyeing Australian developments, hotels, and agricultural and residential assets,” Mr Epstein said.
A parliamentary report released last month called for real estate agents to be fined if they knowingly help overseas property buyers avoid new rules on foreign investment.
The report also recommended a mandatory application fee of $1,500 on all foreign property buyers.
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