PHOTO: The property sector in Melbourne soared during a five-year boom between 2013 and 2017, when home prices rose as much as 70 per cent, but interest has since waned amid turmoil and the coronavirus. Photo: Shutterstock
- For years, mainland Chinese residents were the top foreign purchasers of housing units in Australia, leading to a boom that has since abated
- While mainland buyers have retreated from the Australian market, many are expected to return if conditions eventually improve
When mainland Chinese resident Susan bought an off-plan flat in Melbourne’s new high-end West Side Place development in 2017, the Nanjing-based property investor’s plan was to rent it out upon its completion next year.
She shared the strong Chinese appetite for property – particularly flats in Australia – that sent the sector in Sydney and Melbourne soaring during a five-year boom between 2013 and 2017, when home prices rose as much as 70 per cent.
But despite her desire to own more flats, Susan, who declined to give her full name, said that West Side Place unit would be her last property purchase in Australia for a while. And she is not alone in her reluctance to further invest in the property market down under.
The number of Chinese residents investing in Australian housing has fallen steadily since unfavourable actions were taken by the government against foreign buyers. In 2015, the state of Victoria was the first to introduce a surcharge on foreign purchases, and other states followed suit with fees as high as 8 per cent. A land-tax surcharge of up to 2 per cent for foreign buyers was also levied by individual states.
The taxes can really add up on pricey flats. For example, it is not unusual for an 80-square-metre (861 sq ft) two-bedroom unit in a top location in Sydney to sell for A$1 million (US$713,000) or more.
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