A Chinese Governmentâs state owned fund, now
owns 9 office towers in Sydney and
Melbourne, setting them back $2.45 billion. The expected annual rental income for this
purchase is $145 million. NSW saw the biggest rate of Chinese investment totalling 72%. But the
Chinese investors are not limiting themselves to the CBD or buying on the
fringe of the CBD- theyâre looking into regional areas also.
Between Jan and March 2015, spent $3 billion
alone- or one third of the total $9 billion
spent by foreign investors. So why now? Two reasons: the fall in the
Aussie dollar and the proposed Free Trade Agreement.
The fall in the Aussie dollar is encouraging Chinese students
to return to our universityâs to undertake study- Australiaâs fourth biggest
export to China- estimated worth of $14 billion a year in
exports. Annually 50,000 student visas
are granted, seeing Sydney housing the majority of Chinese students.
The free trade agreement, to come into effect later in 2015,
will increase the amount required for screening from the Foreign
Investment Review Board (FIRB) for commercial property- from the current
AUD$55 million to AUD$1.094 billion.
From December 2015, all commercial property acquired by any foreign
national, will see AUD$25,000 fee applied
to the purchase.
As for the overall real estate market, China, Singapore and
New Zealand have doubled their real estate investments in Australia, according
to the FIRB Annual Report. For
the financial year 2014/15 Chinese buyers have increased their presence in the
Australian commercial market by $12,406m- an increase from the
2013/14 financial year of $5,932m spend. Australia isnât the only
country experiencing increasing purchase from Chinese buyers, globally it is estimated
they spent US$16.9 billion on commercial real
estate in 2014 calendar year.
