Melbourne has become the top destination for Chinese investors seeking to buy affordable properties. News Australia reported that the market downturn the Australian property sector is experiencing has had some unexpected results. In this case, it's foreign investors like the Chinese that are gaining big from the property market's loss because of lowered prices.
Chinese media such as Juwai recognizes the opportunity. The website highlighted how people can get rich through bargains 'while the market is soft.' As the Chinese middle-class got richer, they would look for investments to funnel their money to. Markets like the Australian property market are attractive and offers a suitable, affordable environment for investments.
Despite Chinese interest in Australian properties, this hasn't translated to actual purchases. Buying activity has remained 'flat' to start the year. Buying activity hasn't been as active as it should have been; proof of this is the number of actual buying inquiries on Juwai. Chief executive Carrie Law revealed that it had fallen by 20 percent in 2018.
However, it isn't surprising that this is happening to the Australian property market. ABC Australia pointed out that it's like a cycle that happens every time the markets undergo normalization. It regularly happens to all markets, whether it's the real property market or in the economic sector. Places like Beijing, London, Paris, and Perth are all undergoing a similar situation.
Prices have fallen as a result of the market adjusting to high-interest rates or rationing to fuel debt payment. Every government-from the US to China-is currently adjusting to repay it. It is a big part of controlling the banking sector too; If the debt is not repaid in time, markets are in danger of crashing, and interest rates will just continue to rise.
With a situation such as this, investors are sure to pounce at the chance to invest at cheaper rates. The Chinese are first and foremost as, of all countries, the middle-class of the country is the sector with the most cash. Melbourne just happened to be the place with the most affordable prices, and the result is as seen.
As long as areas like Melbourne and certain parts of the US are adjusting to global economic and property market conditions, foreign investors will be free to buy properties at a discount. How long this will last, however, remained to be seen.
