Ausin Group, a property, financial services and immigration advisory group, claims to be on track to sell more than $1 billion worth of residential Australian property this year to Chinese investors, chiefly from the mainland.
Ausin Group, a property, financial services and immigration advisory group, claims to be on track to sell more than $1 billion of residential Australian property this year to Chinese investors, chiefly from the mainland.
Ausin’s managing director, Joseph Zaja , said it has sold more than $260 million and 450 properties in the past three months and that demand was growing as it built a sales and advice network across major mainland Chinese cities. “Overseas investment has only just started,” Mr Zaja said.
It was being driven by a strong Australian residential property market, a buoyant international student market, tougher investment rules in China and traditional favourite locations for Asians, such as Vancouver, Canada, tightening rules.
Investments totalling billions of dollars were being placed by Chinese ex-pats, who were highly visible at weekend auctions in Melbourne and Sydney, and Asian developers, who account for more than half of the 36,000 apartments planned around the country. Mr Zaja also attributes strong sales to his network of offices in major mainland cities, such as Beijing, Shanghai and in major mainland business centres.
The traditional approach has been to market one-off investments projects, typically on road-shows through Hong Kong. Chinese are major investors in overseas property to diversify risk, as a prelude to immigration and to provide accommodation for their children while studying overseas.
Restraints in China
They have also been discouraged buying multiple properties in China by authorities who have imposed high loan-to-value ratios on second properties and who have restricted borrowing on third and more properties. In Vancouver, where large numbers of Hong Kong-Chinese have emigrated, there has been a reduction in investment and visas by the Canadian government amid concerns that it was inflating local prices.
Five-year-old Ausin Group has more than 300 employees and 11 offices.
“All of our overseas buyers go through Australian banks and usually borrow about 70 per cent of the purchase price,” Mr Zaja said. The typical buyer is between 35 and 60, is seeking to spread investment risk away from China, considering a foreign education for their children and possibility permanent residency.
Australian rules about overseas buyers being restricted to new property, means the bulk has been in, and around, the central business districts of Sydney and Melbourne.
The main recipient has been Melbourne, because of the recent surge in apartment approvals. Inner city areas, like Toorak, are popular, and large communities are developing in middle-ring suburbs, particularly in the south-east suburban corridor.
Article first appeared in the Australian Financial Review