Chinese property investment in Australia has declined by 37 per cent year-on-year, according to a report by London-based property consultancy Knight Frank.
The Changing Currents, Rising Tides report found that Chinese developers and investors spent US$1.7billion in the first half of 2016, with the volume of office and hotel transactions dropping 65 per cent and 42 per cent respectively year-on-year.
“The volume of Chinese investment in Australia is down considerably year-on-year because of a lack of mega-deals in the first half, as large deals such as the Investa portfolio dragged the 2015 number higher,” said Matt Whitby, head of research and consulting at Knight Frank.
However, Whitby said en-block commercial properties in Sydney and Melbourne remained popular to Chinese investors, who were “attracted by rental growth supported by strong tenant demand and a supply shortage.”
The report also noted that Chinese investors’ interest in foreign real estate market remained strong, “driven by Chinese economic and policy factors and are attracted by favourable local market conditions in gateway cities” in Australia, Canada, the United Kingdom, and the United States.
Dominic Ong, head of Asian markets at Knight Frank indicated that more major deals could be made in the second half of the year, as fewer transaction opportunities and a promising rental market have pulled in investors.
“Activity has picked up in the past few months,” said Ong.
“Some of the most recent transactions in Australia from Chinese buyers include 15 Help Street, Chatswood which sold for $43.8 million to One Pro Investment Group; 20 Bridge Street, Pymble which sold for $78 million to YuHu; 210 George Street, Sydney sold for $160 million to Poly Group; and 61 Lavender Street, Milsons Point sold to Aqualand for $110 million.”