In fact, home prices across Australia's capital cities increased by 55% in the past seven years, thanks at least in some proportion to the purchasing power of foreign nationals.
"Chinese buying in Sydney and Melbourne has stepped up from say where it was five years ago," said Shane Oliver, chief economist at Sydney's AMP Capital Investors Ltd. "The Chinese demand – both from mainland China and Chinese Australians – is propping up the market and boosting construction."
This year alone, five out of seven properties sold by First National Real Estate in Lindfield were to Chinese buyers, who are either permanent residents or citizens. "The buyers were able to exchange contracts within a few days of agreeing on a deal, suggesting financing was not an issue," said firm director Lan Zhang.
The phenomenon has triggered concerns among Aussies who fear they are being priced out of their own country's property market. Despite the government's implementation of stricter foreign investment regulations as well as the devaluation of the yuan, Chinese nationals still found a way to purchase properties. And unfortunately for mortgage brokers in Australia, the flood of foreign buyers hasn’t necessarily meant a flood of new home loans.
Chinese buyers often get financial help from their friends, relatives, and even employees back in the mainland, who break down cash they send to Australia into small amounts to avoid scrutiny. This enables them to avoid taking a large mortgage loan from an Australian mortgage lender.
Since September 2013, the China desk of McGrath Ltd., the only listed real estate agency in Australia, has assisted in sales worth $140 million.
Collections: Mortgage News