Local buyers follow the Chinese treasure hunt in Sydney Property Market

Local Australians are increasingly following the Chinese lead in apartment-buying decisions.

Coming from a much longer tradition of living in high-density cities, apartment buyers with some kind of Chinese heritage usually opt to buy close to transport hubs, shops and restaurants.

''They're good buyers to follow because they have a checklist of what they want, and they take emotion out of their purchasing decisions,'' says the chief executive of development in NSW and Victoria for Mirvac, John Carfi.

Mirvac's new 37-level Chatswood tower ERA, the fifth tower in the Pacific Place complex, has a high proportion of Chinese buyers.

''Fundamentally, they are savvy buyers and particularly good at buying off the plan, probably because they're better educated when it comes to real estate as they're accustomed to apartment living, and most in China and Asia are sold off the plan,'' Carfi says.

''Their criteria for buying - well located, in good transport nodes and well serviced by amenities - are excellent, and good feng shui in facing north-east makes perfect sense, too.''

To the north-west, Top Ryde City Living, the $500 million five-tower complex atop the newly built shopping centre, is also popular among Chinese buyers, who may be Australian-born or come from mainland China or Hong Kong, Singapore, Malaysia or Indonesia.

''The primary reason is that there's a certain aspirational quality that comes from where you live as well as the general lifestyle attributes,'' says the director of sales and marketing with developer Crown International, Haig Conolly. ''Buyers who have some Chinese heritage like to live in developments with facilities like public transport, five-star restaurants, top-class shopping malls and employment close, and increasingly Anglo-Australians are moving the same way, with the traditional quarter-acre block no longer holding the same appeal it once had.''

When Hong Kong-born Chris Ma saw the plans to convert the fifth and final tower of ERA at Pacific Place in Chatswood from commercial to residential, he liked the look of it so much, he bought three apartments.

He set aside an $815,000 two-bedroom apartment off the plan for his eldest son, intends to rent out the $642,000 one-bedder, and the third, a three-bedder bought for $1.07 million, is pencilled in to be sold on completion for a profit, he says.

''I think that'll sell for $1.38 million,'' says Ma, 60, a father of two who makes a living from property transactions. ''I like to invest in Mirvac properties.

''My friend lived in a Mirvac house once and, after 20 years, he phoned them up and said there was a problem. They came and fixed it. It was magical.''

Ma settled in Australia in 1989 and says that of the ERA buyers who are of Chinese heritage, 92 per cent have permanent residence or citizenship, with the rest living overseas.

''Australia has a good, stable economy to invest in, has better weather than Canada … and this is a very good development,'' he says.

''I have lunch in a Chinese restaurant every day opposite the site to watch what the workmen are doing. And they are doing a very good job.''

Antony Fung

Ashfield Real Estate

www.ashfield-realestate.com.au

1300 938 931

Sydney's property market sets a new clearance rate record, the 2nd time in less than a month

Sydney’s auction market on Saturday hit a new clearance rate record of 88.2%, beating the previous benchmark of 87.5% set less than a month ago.

Of the 737 auctions scheduled in Sydney, the Domain Group reports it had collected 599 results.

Domain senior economist, Dr Andrew Wilson, said the buying trend could see the local market even hit 90%.

“That would have been a completely outrageous suggestion but it’s now becoming more likely,” he said.

The highest price was for a six-bedroom house in Strathfield, which sold for $4.42 million.

Other top sales included a five-bedroom home in Newington, for $1,666,000, a three-bedroom Federation residence in Fairlight for $2,805,000 and a house in Haberfield for $3,965,000.

The record-breaking results however have economists torn on what is next for prices in the Sydney market, after experiencing a 12.4% surge in 2014.

Economic researchers BIS Shrapnel last month told The AFR that Sydney house prices will rise, expecting to see as much as a 20% increase over the next two years.

This would push the median house price well above $1 million by June 2017.

BIS Shrapnel suggested pent up demand, a push by investors into the market and an undersupply of new housing stock would be a driving the price surge.

Meanwhile just this week HSBC Australia chief economist Paul Bloxham said the opposite.

He told News Limited that he expects the Reserve Bank to hike interest rates in 2016, a move which would cool the booming market.

He said current prices are growing at an “unsustainable pace” and warned purchasers should expect a correction down the line.

HSBC is forecasting Sydney house prices to be broadly flat in 2016 rather than suffer a big fall.

Also this week, Business Insider discussed the boom in residential construction currently littering Australian cities’ skylines. 

Referencing research notes from ANZ, David Scutt suggested that the change has almost entirely been driven by foreign investment in residential property. 

Antony Fung

Ashfield Real Estate

www.ashfield-realestate.com.au

1300 938 931

Auction frenzy in Sydney keeps property prices rising

Data shows prices are up 6.4 per cent in Sydney so far this year (2015), compared to 3.9 per cent gains in Melbourne, a 0.1 per cent rise in Brisbane, a 0.2 per cent decline in Adelaide and a 1.6 per cent slide in Perth.

Property analysts, such as Louis Christopher from SQM Research, say that most other data confirms that Sydney is where the main action is taking place.

"At this point in time we think the [Sydney] market's about 25 per cent overvalued and, if our forecasts come in for this year, it'll actually get up to about 40 per cent overvalued. It's probably about the second highest overvaluation point we've ever recorded, the highest being back in 2003 when, on our numbers back then, the market was about 55 per cent overvalued."

Mr Christopher said that, beyond Sydney and some parts of Melbourne, there is generally not much upward momentum in the Australian housing market.

"We don't believe, for example, there's a national housing bubble," he said.

"We can definitely pinpoint areas where the markets have not moved for a very long time and they are undervalued compared to incomes.

"So, even with the cheap credit, it hasn't influenced every market everywhere, because local economic factors have taken a greater hold."

Mr Christopher points to collapsing home prices in most mining towns, falling prices in Darwin and Perth, and relatively stagnant prices over recent years in Brisbane, Adelaide, Canberra and Hobart as evidence.

Antony Fung

Ashfield Real Estate

www.ashfield-realestate.com.au

1300 938 931