A massive influx of cashed-in Chinese buyers has resurfaced to wreak havoc on the Australian property market, driving up the prices of everything from luxury homes and brand new units to large tracts of land.
Long-standing Covid-19 lockdowns in China were finally lifted late last year, sparking an exodus of those seeking a better life in Australia, where they can buy a family home with four bedrooms or more for the same price as a unit at home in Shanghai.
The market share of foreign buyers in NSW recently rose to its highest level in eight years of 16.2 per cent in the first quarter of 2023, compared to 6.7 per cent in the previous quarter, according to the latest NAB Residential Property Survey.
Many more Chinese buyers are heading our way after Singapore last week doubled the stamp duty surcharge for foreign investors from 30 percent to 60 percent.
Suburbs on Sydney’s upper north coast have become popular with Chinese buyers willing to pay up to $400,000 above list price.
Some pay with cash they’ve saved over the three years they’ve been in lockdown, or just need small loans.
Cashed-in Chinese buyers are driving up prices for Sydney properties going under the hammer
Eighteen months after it sold for $3.5 million, Chinese buyers recently bought this six-bedroom house in St Ives for $7 million
“They have absolutely disrupted the local market,” Henny Stier, co-founder of OH Property Group, told Daily Mail Australia.
“And it’s not just ready-made properties and units of the plan. They also love large areas of land where they can demolish and rebuild.
“What used to cost $2.5 million to $3 million on the Upper North Shore is now selling for $4 million and more.”
A four-bedroom brick house in a prime location in St Ives recently went under the hammer for $3.67 million, $1.43 million more than it last sold in 2017.
The new Chinese owners are expected to demolish and rebuild the sought-after block, which the description of the property for sale describes as ‘packed with potential’.
‘St Ives is a largely undefended suburb where the blocks are bigger and you can easily demolish and rebuild, unlike Roseville and Lindfield where many houses cannot be demolished because they are listed buildings. said Mrs Taurus.
Another Chinese buyer is the proud owner of a newly built six-bedroom that sold for $7 million in the same suburb, double the price it sold for in 2021.
The new owners are expected to tear down and rebuild this sought-after block in St Ives, which sold for $3.67 million
An Indian family who recently emigrated from Singapore bought this Killara house on Sydney’s north coast for $4.52 million
Ms Taurus says it’s hard to say how long the Chinese boom will last.
“This influx has come without warning,” she said.
“These buyers don’t just go to one area. Once prices rise, they move on to suburbs such as Turramurra, West Pymble and on to North Parramatta.”
Many new Chinese buyers have established a relationship with Australia through permanent residency or have relatives here.
“The demand has always been there,” Ray White Upper North Shore agent Jessica Cao told Daily Mail Australia.
“Many have lived in China and Hong Kong in recent years and have decided to move back to Sydney after lockdown restrictions were finally lifted.
“Because supply is limited, it drives up the prices of everything from lots of land to luxury homes.”
A four-bedroom house in Roseville Chase sold at auction in March for $2.84 million, nearly $400,000 above the list price for an adult family from China that has rented in Sydney for the past year.
Another Chinese family successfully bid for a four-bedroom family home in Lindfield earlier this month for $3.79 million.
Less than 2 km away in Killara, a six-bedroom house was sold at auction on the same day for $4.52 million to an Indian family who had recently emigrated from Singapore. It last sold five years ago for $2,788 million.
Chinese buyers bought this Lindfield home at auction earlier this month for $3.79 million
OH Property Group co-founder Henny Stier (pictured) said the recent influx of Chinese buyers to Sydney’s north coast arrived without warning
Juwai IQI co-founder Daniel Ho said Australian property is now considered a “revenge purchase” for Chinese buyers.
Households in China added a combined $2.6 trillion to their bank balances in 2022 alone.
“The confidence many Chinese had in their own economy and housing market fell during the pandemic, so overseas markets like Australia look better by comparison,” Mr Ho told the The Sydney Morning Herald.
“In China, they talk about ‘revenge spending’ as people spending on all the things they couldn’t buy during the lockdowns.”
Foreign buyers were bigger players in Australian housing markets in the first quarter of 2023, according to the latest NAB Residential Property Survey.
The total share of foreign buyers in new real estate markets rose to 7.9 percent in the first three months to March, compared to 5.2 percent in the previous quarter.
In established housing markets, the market share of foreign buyers rose to 3.8 percent, an increase of one percent from the fourth quarter of 2022.
Ms. Taurus offered some advice for potential buyers who are being priced out by Chinese buyers.
“Stay away from the markets that are heated and look at areas where they are not currently looking,” she said.
This four-bedroom home in Roseville Chase recently sold at auction for $2.84 million, $400,000 above list price
An influx of new Chinese buyers arriving in Sydney has created chaos in the property market by driving up prices