Wise Investors from the EAST
Thanks to our great weather, waterfront homes and unparalleled value for money, Chinese and Russian buyers are warming up to residential property both for lifestyle and investment on the Gold Coast. In the long run, it could even be the fire that drives real estate out of the present slump.
According to REIQ stats, last year Chinese buyers finalised deals for $22.76 million in houses and apartments, while buyers from the Russian Federation signed for $22.7m in homes.
Russia’s increasing middle and affluent classes are growing due to oil and mining wealth. Australian developers are heading to Moscow with promotional roadshows specifically targeting this market with the allure of sun, sea and great value. And it’s paying off.
In the 2006-07 financial year, Russians bought 64 Gold Coast properties, totalling $35m. Last year, Russians spent more on individual homes than Chinese buyers, with an average purchase price of $516,000, compared with $446,000 for Chinese citizens.
But Chinese buyers are emerging as a force, and it’s just the tip of the iceberg of the numbers that could be headed our way, for lifestyle change, education and investment.
According to Oresti Astras, who specialises in prestige property around Clear Island Waters, Robina, Mermaid Waters and Broadbeach Waters, “Chinese buyers are looking for value, but not bargains in the lower end of the market – they are seeking quality around $1.4m”.
As Astras explains, unlike the Japanese and New Zealand property investment spikes, the Chinese market has massive potential.
At recent estimate, China is home to 970,000 millionaires, 40,000 ten-millionaires and 1,400 billionaires. Affluence is an economy driver and the Chinese are on a spending spree. With a population of 1.3 billion people, it’s no wonder the whole world is hoping to do business with the Chinese. There are different types of buyers of local property, says Astras.
“There’s the investor and those buying for a lifestyle choice, and some are doing a bit of both. They may buy a unit or house close to universities, so that their kids can live here and then they visit and have as investment which they can also rent out.”
While the Gold Coast is gradually enjoying more attention, Melbourne and Sydney are getting the bulk “because they are better known”, says Astras. “The Chinese move there to live and then realise the Gold Coast is better value and offers a better lifestyle, so we are seeing interest increasing.”
The wide waterways, privacy and spacious, modern homes on generous blocks are appealing for this new wave of buyer. “Plus, around Clear Island Waters, there are no midgies, so it’s an attractive to them as it is to us!”
With property slumping to 2004 prices, the Chinese market, being as astute as other investors, are witnessing “incredible value, compared to Melbourne or Sydney”.
“They can buy a waterfront home for the price of an apartment in Sydney. The unis up here are gaining very good reputations overseas, so it makes more sense for investors to buy here.”
According to Astras, currently over 50 percent of buyers for the homes he represents above $1.4m have been Chinese. “But that varies. It can be as high as 60 percent.”
The Chinese influx can only be good for the Gold Coast, explains Astras. “In terms of the education sector, tourism and property, it is not the saviour, but it is helping. The real estate market has been underpinned by Chinese purchases, particularly in the premium end.”
Aiming to take full advantage of the stream that could turn in to a river, Astras is set to hang his shingle in the special economic zone of China, Shen Zhen, with a Chinese business partner. “We are serious about promoting the Gold Coast and the benefits of buying property here. It’s only a matter of time before the property market heats up again.”
