Chinese Buyers Flock to Gold Coast Property Market for Bargains

By Kristie Kwok on 13 Dec 2013
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Chinese Buyers Flock to Gold Coast Property Market for Bargains

Are Chinese investors changing the face of the Gold Coast property market?
Photo: Paul Bica

Thanks to price declines of up to 50 per cent in some parts, Chinese buyers are hunting for property bargains in the Gold Coast.  

According to Darrell Irwin of Colliers International, the current wave of Chinese investment in the Gold Coast has the potential to be just as big, if not bigger, than the Japanese boom of the ‘80s.

Chinese Investors Changing the Face of Gold Coast Property Market

Back in May, LJ Hooker Surfers Paradise made an early claim that Chinese investors were changing the face of the Gold Coast property market. 

Six months on, local arch rival Ray White is also reporting that overseas Asian buyers, made up mainly of Chinese investors, are accounting for a quarter of their monthly sales.

Gold Coast Property Sales Finally Recover

For many, the news of overseas interest is a welcome relief, given house prices in the region had plummeted by an average of 25 per cent from their peak in 2010.

The Gold Coast Market Update released last month showed signs of recovery, with dwellings sold in the last twelve months experiencing lower vendor discounts than a year earlier.  

“The current wave of Chinese investment in the Gold Coast has the potential to be just as big… as the Japanese boom of the ‘80s.”

The average time on market of a property for sale in Gold Coast has also reduced. Additionally, the region saw a 20 per cent increase in sales volume along with a 2.1 per cent growth in dwelling prices.

Despite these statistics, Luke Vaughan of Crown Realty expects the full recovery to be some time away.

“We’re finding the bottom and there are some great deals to be had, but not all areas of the market have experienced the bottom,” he said.

Bargain Hunting Chinese Different to Japanese Investors

Naturally, comparisons are being drawn between the current wave of Chinese buying and the Japanese investment boom some 30 years ago, which came to an abrupt end when Japan’s asset prices bubble burst. 

“There is a growing sense of optimism that the Chinese buyers are in for the long haul…”

According to local agents, a key difference between the Japanese and Chinese investors is that the Japanese were looking for top dollar properties while the Chinese are trying to scoop up bargains.

“Many Australians mistakenly think Asian buyers will pay a premium for property which is rarely the case, but the great benefit to sellers is they are cash purchasers who aren’t dependent on bank finance or valuations,” said Andrew Bell, Chief of Ray White Surfers Paradise.

Chinese Predicted to be Long-term Investors of Gold Coast Property

There is a growing sense of optimism that the Chinese buyers are in for the long haul, unlike the Japanese who came and went.  A Chinatown is even being planned for Southport to cater for the growing Chinese presence.

“I think you will see Chinese investment as a long-term trend,” said Tony Tooma of LJ Hooker Surfers Paradise.

“The Chinese are a lot more astute than the Japanese were when it comes to the acquisition of real estate assets,” Mr Irwin said.

About the Author

Kristie Kwok is a Street News writer and a fully qualified chartered accountant with a Bachelor of Accounting and Finance degree. Kristie has a passion for all aspects related to property. She also has a strong interest in the economy and financial markets. Kristie has worked for reputable corporates such as KPMG UK, UBS, Lloyds Banking Group and the Royal Bank of Scotland.

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