Sydney house prices driven by Chinese 'bolthole' buyers
WooBuyers's new project 11/1 northcliff street, milsons point
Foreign buyers continue to supercharge the Sydney housing market, accounting for more than 21 per cent of demand in NSW and 15 per cent-plus nationally.
Data released as part of National Australia Bank's quarterly residential property survey shows that while house price growth has slowed somewhat nationally, Sydney continues to outperform, fuelled by foreign investment.
"What we think is that it is mainly Asian [investment] and that it is mainly Chinese," NAB chief economist Alan Oster said.
The Sydney figure is the highest to date in the NAB survey.
Mr Oster subscribes to the view that Sydney property is an attractive way for Chinese investors to move cash out of China.
"It's a bolthole, that's everyone's view that we talk to," he said.
According to Pete Wargent, he nominates four ways in which Asian investment is pumping up, or at least affecting, Australia's real estate markets: developer capital forcing up land values; a doubling of approved purchases; record Chinese tourism spending; and capital flight from China.
"In the development space there have been several instances of Asian developers paying prices comfortably in excess of what is perceived locally to be "fair market value", in certain cases 25 to 40 per cent above what domestic developers might previously have been prepared to pay," he said.
Mr Wargent pointed to Hong Kong's Golden Horse group purchasing a development site in Erskineville, which at $350 million was the highest price paid for such a transaction.
"Increasingly assured of their ability to peddle apartments offshore, developers have proceeded to commence the construction of record volumes of high-rise supply, and pleasingly this trend is helping to add significantly to the aggregate dwelling stock," Mr Wargent said.
Source Credit - Fairfax Group