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Chinese Investments Fuel Australian Residential Property Market Modeina
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Chinese investors are among the leading drivers of Australian economy in terms of the real estate market. Studies reveal that they are one of the foreign groups that dominate the residential property market in Australia in terms of quantity of investors and investments.
Chinese Investment in Australia’s Residential Property Market Official figures revealed that China was (and still is) one of the biggest investors in Australia, the second biggest investor group in real estate after the US in 2010. Their investments more than doubled over the years, from $2.3B to $12.4B. Now, they are dominating real estate investment as some of China’s government-backed corporations are putting more cash in real estate than the local developers. Industry experts also revealed Chinese investment hot spots as well as the results of such ventures. Some of their favourite spots are Sydney and Melbourne, both of which have an overflow of residential properties at highly competitive rates. Some also noted that Asian foreign investments are fuelling the housing bubble in Australia.
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Why Chinese Investors Love Australian Real Estate Among the primary reasons for Chinese investors are the safety, stability and security of assets that real estate in Australia provides. Unlike stocks and cash that are constantly fluctuating in value, property does not easily change or lead to loss. Another reason is the high demand for residential property in Australia. The strong and stable growth of the Australian economy improved the purchasing power of the people. This means they can now afford to buy or rent better homes. This results in more profits for property developers and investors as well. The recent policies in real estate partly contribute to the increase of Chinese investment in Australian real estate market as well. For instance, the reduction of property prices and mortgage interest rates in Melbourne and other places spur the demand for affordable housing among consumers. Meeting this high demand would mean more returns on investments. These findings reveal that residential properties are lucrative investments, be it for Australians or the Chinese. With the high demand for residential property, people can find potential homebuyers and tenants everywhere. That, and the trends in property prices and interest rates, make real estate a venture that yields high returns.
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Sources: http://www.modeina.com.au/land-for-sale http://www.abc.net.au/news/2015-10-12/selling-the-australian-property-dream-tochina/6841810 http://www.smh.com.au/business/property/melbourne-house-prices-tipped-to-dive-whilesydneys-climb-then-plateau-20150712-giaesx.html
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