38% of Australian residential development site sales in 2016 bought by Chinese
PETALING JAYA (Feb 8): Chinese developers and investors have bought a total US$1.8 billion (RM7.99 billion) worth of Australian residential development sites in 2016, amounting 38% of total sales, according to international real estate firm Knight Frank.
“This is up 12% in comparison with 2015, and up 36% from 2012,” said Knight Frank in its latest report “The Rise of Chinese Developers in Australia — Market Insight: January 2017”.
The firm also found that as Chinese developers gain confidence in the Australian market, the sites transacted have increase significantly in average size — at least more than 18 times since 2012, to average 21,045 sq m in 2016.
Meanwhile, the average development site purchased by Chinese developers and investors could yield 502 potential dwellings, up 13% from 444 potential dwellings for 2015 sales, noted Knight Frank.
“China has very much led the globalisation of development activity over the last five years, with Australia, the US and UK, [which are] the major target markets.
“Growth opportunities, diversification and brand building have been key push-factors encouraging this wave of outbound capital, with a significant number of top-tier developers now active overseas,” said head of research for Knight Frank Asia-Pacific Nicholas Holt.
He added that the increasingly stringent capital controls enforced by the Chinese government could dampen such activities, although given Australia’s solid fundamentals “we expect the major state capitals to continue to be targeted over the coming years”, added Holt.
Meanwhile, head of residential research for Australia Michelle Ciesielski said: “Long-term strategies must now be devised to allow for the Chinese government tightening the ease of outbound capital flow, and local lenders limiting funding to control their liquidity and satisfy Australian Prudential Regulation Authority requirements.
“But one thing is clear — Chinese developers are determined to succeed in Australia, and for many generations to come,” she said.
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