Foreign Investment In Australian Property Year Of The Dragon

FOREIGN
INVESTMENT IN
AUSTRALIAN
PROPERTY
MARKETS

WHAT’S SET
TO UNFOLD
IN THE YEAR
OF THE
DRAGON

www.propertyobserver.com.au

WHAT’S SET TO UNFOLD IN THE YEAR OF THE DRAGON

FOREIGN INVESTMENT IN AUSTRALIAN
PROPERTY MARKETS

A
luxury waterfront home at Castle An interesting detail in the trend is that
Cove on Sydney’s Middle Harbour Chinese-Australian families are lead-
sold for $6,066,000 last year. It ing the way with purchases of dual-key
was certainly a strong sale price – and apartments because they suit inter-gen-
something of a give-away that the buyer’s erational living – with, say, an elderly
origins were mainland China. relative or young university student living
Asian buyers and investors are a key independently in a one-bedroom space,
influence within some sectors of the internally connected to the family’s larger
Australian property market, defying the apartment.
strong Australian dollar and underpinning The good educational opportunities,
demand for property. its geographic proximity, the wealth of
Earlier this year Savills announced the attractive assets, political stability and a
sale of the luxury penthouse at Lumiere predictable legal and banking environ-
Residences Sydney for $8.1 million. ment all make Australian an attractive
It went to a Thai buyer – another sale destination for investment.
highlighting that Asian buyers continue This eBook looks at recent times and
to seek opportunities to acquire premium envisages what could unfold in the Year
properties in Sydney’s central business of the Dragon.
district.
But proximity to the centre of town isn’t
the only requirement for the Asian buying
dollar. Being close to schools and uni-
versities are key components of buying
desires of Australians of Asian heritage
and Australia-based Asian nationals.
There’s understandably been good buy-
ing interest in the Central Park project at
the Sydney CBD’s Broadway precinct
given its proximity to top education
institutions.
Launched in 2010, Central Park has
not been formally marketed in Asia,
but it is clear there is a strong, infor-
mal referral network at work between
Australia and China, Singapore and
Indonesia.
It highlights the well-established cultural
acceptance of apartment living within the
Asian community – with this trend now
extending from the CBD to other high-rise JONATHAN CHANCELLOR,
EDITOR, PROPERTY OBSERVER
suburbs like Chatswood.

2 www.propertyobserver.com.au


SYDNEY A ‘WORLD CLASS’ CITY AND A
SAFE HAVEN FOR ASIAN INVESTORS

“Sydney is geographically very well

Qin Australia?
. I am a foreign person. Can I invest in property placed to benefit from investment from
frustrated Chinese and other Far Eastern
Yes, depending on what you wish to invest in. investors, but they will need to open up
Acquisitions of residential real estate require prior their markets to such investors to trigger
foreign investment approval before the purchase can this,” according to Savills research.
proceed, though there are certain exemptions. “The city’s undersupply of accommoda-
Certain acquisitions of commercial real estate also tion and high in-migration plus restrictions
require prior foreign investment approval. on new development, due to zoning and
All Q&As sourced from the Foreign Investment Review Board geography, are likely to keep prices the
highest of any Australian city.”

T
Savills describes Sydney as beginning
he inclusion of Sydney in Savills’
to display many of the common character-
landmark World Class Index high-
istics of the World Class city – constrained
lights the city’s emerging standing
land supply, increasing pressure from
in the world of prestige international prop-
overseas investors and high demand for
erty, offering a safe haven for international
prime accommodation – but it is unusual
investors, particularly from Asia.
in offering very spacious living accom-
The 2011 Savills report on the world’s
modation in relation to other leading
10 leading prestige property locations for
international investment locations.
international investors suggests Sydney is
“Asian interest in residential develop-
positioned to benefit from the both the “old”
ments within the Sydney metropolitan
and “new” world economies it bridges.
area is at an all-time high, with both Asian
Savills NSW research director Simon
developers and private investors making
Hemphill believes Sydney is seen as a
substantial investments in the market,”
stable old-world investment choice with
Hemphill says.
a well-established luxury housing market,
“Anecdotally, almost a third of residen-
while also in close proximity to the boom-
tial projects in the Sydney metropolitan
ing new-world economies of Asia Pacific.
area currently under construction or being
Luxury Sydney property also repre-
actively marketed are owned by Asian
sents very good value on the global stage,
development companies.
according to Savills, which ranks Sydney
“Private investors from Asia also make
as the cheapest location for global billion-
up a significant portion of buyers for inner-
aires, while also offering the largest size
city residential developments, such as the
of homes for the super-wealthy, at almost
Frasers Property Central Park develop-
1,900 square metres.
ment in Broadway, in the Sydney market.
“Overall, Sydney still offers international
Indeed, circa 25% of purchases made so
investors great value and is extremely
far in the Central Park development were
well-located to take advantage of Asian
by south-east Asian private investors. This
wealth if and when its policies restricting
trend is set to continue, given the nature
international buying are relaxed,” Hemp-
and location of a number of developments
hill says.
currently mooted in and around Sydney.”



CROWN GROUP SEEKS OUT ASIAN
BUYERS FOR TOP RYDE PROJECT

Crown Group’s signature Asian-inspired
designs, which create private sanctuaries
for residents to call home, continue to
attract buyers from all around the world.
“Our properties are designed to incor-
porate principles of feng shui and the
architectural features display a fusion of
Asian influences.
“At Top Ryde City Living for example,
residents can get some quiet time at the

C
meditation platform, sit and read a book in
rown International Holdings the beautifully landscaped gardens, swim
Group enters the Year of the a few laps of the pool or head to the gym
Dragon with ongoing projects for some exercise or yoga,” says Sunito.
that will generate apartments with an end Crown Group’s $500 million Top Ryde
value of more than $2 billion. City Living project, one of Sydney’s larg-
Crown has also announced plans to set est residential property developments, is
up a display pavilion in the heart of Syd- currently being pre-sold, and Crown has
ney’s Chinatown later this year to better launched marketing initiatives in Jakarta,
meet the needs of the Chinese community Indonesia in 2011, with further roll-outs in
and visitors to Sydney. Shanghai, China and Singapore planned
Crown International Holdings chief for 2012.
Iwan Sunito says prospective buyers or Top Ryde City Living has been pre-
investors will be invited to relax in very approved by the Australian Government’s
comfortable surrounds while they have Foreign Investment Review Board to
the opportunity to converse with one of accept non-Australian resident purchas-
Crown’s international and multi-lingual ers, so foreign investors are assured there
sales consultants, who are fluent in a vari- is no approval process required or uncer-
ety of languages including Indonesian, tainty in being allowed to purchase.
Korean, Mandarin and Cantonese. Crown offers foreign investors a 5%
“The vibrant and dynamic display pavil- rental guarantee for one year.
ion will provide locals and international “We have had a great response to the
visitors with detailed information about the first release of Top Ryde Living City with
various Crown projects, as well as being approximately 90% already sold and only
able to experience a display apartment,” 26 apartments remaining for sale in stages
Sunito says. 1 and 2, which range from $500,000 for a
“Crown understands it’s important to one-bedroom plus study with car space to
provide all of our clients with detailed $875,000 for a three-bedroom plus study
information for each of our developments, and two car spaces,” Sunito says.
and we believe it’s important to provide The next launch will be in March with
this service in a person’s first language the release of 135 apartments, says Kym
wherever possible.” Rogers, head of sales and marketing.



FOREIGN DEVELOPERS GRAB 30% SHARE
OF AUSTRALIAN APARTMENT MARKET:
CBRE’S KEVIN STANLEY

I
n a major trend that mirrors current

Qproperties can I
How many
investment into the commercial real .
estate market, foreign-based companies
have moved firmly into the business of purchase?
developing residential apartments across There are no
Australia. More than 13,000 apartments restrictions on the
are presently either planned, being number of properties
marketed or are under construction by you are permitted
foreign companies in 37 separate projects. to purchase, unless
Based on average apartment completions
you are a temporary
in Australia each year, this represents a
resident and want
market share as high as 32%.
to acquire more
than one established
SINGAPOREAN AND HONG KONG
(second‑hand)
DEVELOPERS LEAD THE PACK
dwelling as your
principal place of
Asian developers account for 92% of all
residence.
apartments presently being proposed or
developed by foreign companies in Aus-
tralia. The balance is split almost evenly The next most significant source of
between the USA, Canada and an as-yet- development capital is Hong Kong, with
unknown country source. See Chart 1 for a single developer (Far East Consortium)
details. Developers from Singapore are behind 2,700 apartments in two Mel-
proposing or building more apartments in bourne projects.
Australia than devel-
opers from any other
foreign country at pre-
sent, by a big margin.
Singaporean devel-
opers are responsi
ble for almost 5,000
apartments presently
planned or underway,
with 58% of these
being facilitated by
the globally active
developer Frasers
Property, and 65% of
these in the Central
Park project in Syd-
ney.



KEVIN STANLEY (CONTINUED)

DEVELOPMENT IS WIDESPREAD In a surprising result, Melbourne has a
greater number of apartments proposed
Apartments are being proposed or built by foreign developers than Sydney,
by foreign developers in a wide range of despite being a city with 450,000 fewer
locations across Australia and not just in people.
the bigger capital cities.
Chart 2 shows the num-
ber of apartments by
location.
The distribution tends
to follow the size of the
cities. The biggest mar-
kets with the highest
demand for apartments
are Sydney and Mel-
bourne, accounting for
79% of the total. Beyond
this, though, foreign
developers are facili-
tating apartments in a
wide range of locations,
including the Gold Coast (10% of total), Location by submarket varies widely,
Brisbane (6%), Perth (3%) and Adelaide as shown in Chart 3. Melbourne is expe-
(2%). riencing the highest concentration of CBD
projects of any of the major cities. In Mel-
bourne’s case, we think this has been
driven by the relatively high availability
of large sites, especially in the northern
blocks of the CBD.
Sydney has a much more balanced dis-
tribution of apartments between the CBD,
city finge and suburban submarkets. This
is a function of the tightness of site availa-
bility and the expense of land in the CBD.
In Brisbane, the city fringe has been much
more popular with foreign apartment
developers than the CBD, although there
is a much smaller relative penetration by
foreign developers generally into the Bris-
bane market to date, with a greater focus
on nearby Gold Coast instead.




IN THE PIPELINE countries. Rather than potentially over
exposing their business to the economic/
The trend of foreign companies actively consumer cycles of just their home coun-
developing residential property in Aus- tries, these companies are spreading
tralia appears to have a long way to run. operations with the aim of tapping into dif-
Only 40% of the apartments being facili- ferent cycles.
tated by offshore developers are under
construction and more than 7,500 apart- 2. Australia is considered a market with
ments are in the development pipeline. steady, reliable demand. Foreign devel-
Many of the large-scale projects, par- opers see Australia as a growth-style
ticularly in the bigger markets of Sydney, economy, with steady occupier and inves-
Melbourne and the Gold Coast are staged, tor demand for the end apartment product.
which will allow for adjustment to market Foreign developers believe, while there
delivery according to demand and this will are cycles to be mindful of, that inevita-
limit development risk. Off-the-plan pur- bly the underlying growth of the Australian
chasing is common and will also allow for economy and the population will provide
individual stages or projects to proceed in opportunities to sell finished product.
line with demand.
Recent project launches suggest 3. Shifting equity to a safe country. By
demand from end purchasers for well shifting equity into Australia to develop
located and quality product remains high, residential apartments, some developers
with reports of almost whole project stages are seeking to find a “safe haven” for this
being sold out on launch weekend, lead- capital.
ing to future stages being brought forward.
4. Dwelling starts are at a low point in
WHY THIS TREND, WHAT ARE THE the cycle in Australia. Recent high mort-
IMPACTS AND WILL IT CONTINUE? gage rates and residential prices have
suppressed overall buyer activity and
There appears to be a confluence of caused dwelling starts, for both houses
reasons why this trend has emerged and apartments, to drop to a cyclical low.
so strongly in the past few years, some This means in most markets, there is less
of which are similar to the motiva- competition for those developers who can
tions behind the current high level of facilitate projects, while strong underlying
commercial property investment from user demand remains in most locations.
offshore. Some of these reasons are:
5. Development site costs are relatively
1. Diversifying risk and providing for low in the pricing cycle. There have been
business growth in new markets. Many a large number of development sites on
of the foreign companies developing the market over the last few years in the
residential apartments in Australia are wake of the global financial crisis. This
well-established businesses in their home has led to a drop in prices of anywhere




QAustraliansame-sexAm I exempt ifwithpurchase
I am in a
.
citizen.
relationship
we
an

residential property together as joint tenants?
Yes, the spouse exemption applies to you if you
‘have a relationship as a couple living together on
a genuine domestic basis’ (as defined in the Acts
Interpretation Act 1901).

between 5% and 50%, but more typi- Some concerns have been expressed
cally in the 20% to 30% range. Foreign about the potential for exacerbating the
developers have taken advantage of this apartment oversupply situation in the Gold
situation, improving development feasibil- Coast, with 1,350 units proposed there by
ity by purchasing at a lower rate. foreign developers. However, we think that
given the lead time for the approval and
6. A relative ease of doing property development of such large-scale projects
business. While there are always improve- and provided they are carefully pitched
ments to be made, foreign investors and to meet demand, this product should be
developers tell us Australia is a relatively readily absorbed into the local market.
easy place to do property business. It is Despite some concern for oversupply
highly transparent, heavily informed and and settlement risk, the apartments devel-
enjoys high security of real estate tenure. oped by foreign companies appear to have
been well received into the local market,
The impacts of foreign involvement in with a high level of sales off the plan and
the apartment market are many and are projects proceeding to completion. We
mostly positive. Critically, it’s providing see the risk of apartments developed by
a stimulus to the foreign-based companies as no different
construction sec- to those of domestic companies.
tor at a time when The drivers of this significant trend
development appear likely to continue. With strong
activity is generally growth in equity capital, especially in Asia,
at a low level. looking to geographically diversify and
Second, it’s pro- reasonable levels of demand for the end
viding new ideas, product driving solid development returns
standards and in Australia, subject to micro-market con-
designs to broaden ditions, we expect this trend to continue
the product range into the future.
in Australia and
introduce fresh KEVIN STANLEY
competition in EXECUTIVE DIRECTOR FOR GLOBAL
these areas. RESEARCH, CBRE



MORE PAIN FOR REGIONAL HOTELS AS
CHINESE TOURISTS PREFER CITY OVER
COUNTRY: RBA

R
egional hotel operators must find
ways of enticing Chinese visitors
to coast and country resorts or risk Qapproval to inherit
Do I need
.

another decade of struggle, according to property someone left
the RBA’s December 2011 quarter bulle- me in their will?
tin. The RBA forecasts growth in Chinese No, you are
visitors alone is expected to contribute not required to
about one-third of the growth in Australia’s apply for foreign
tourism export earnings until 2020. investment approval.
Between 2001 and 2011, Chinese visitor Any acquisition of
numbers have grown by 13.4% annually, residential property by
contributing 16.4% to annual revenue, way of an inheritance
while Indian arrivals have increased by (settlement of a legal
12.3% annually, contributing 7.7% to will) or by a court
tourism revenue. In comparison, visitors ruling is exempt from
numbers from the US and UK have not
the requirement
grown over the last decade.
to seek foreign
investment approval.

ism industry in leisure and regional areas,
which have at least to date had limited
exposure to the growing segments of the
inbound tourism market compared with
Australia’s capital cities,” says the RBA.
According to the central bank, overseas
visitors prefer to stay in capital cities (and
capital city hotels) due “the importance of
capital cities as major international gate-
ways to Australia”.
“Capital cities have benefited from a ris-
ing share of overseas visitor expenditure
as spending by international visitors in
regional areas has declined somewhat in
recent years in real terms.”
According to the Tourism Forecast- “This trend is consistent with the strong
ing Committee, the share of spending growth in Chinese visitors – who dem-
by international visitors in total tourism onstrate a strong propensity for travel to
expenditure in Australia is tipped to con- capital cities – and the decline in Japanese
tinue to rise over the next decade, driven tourists that has had a more pronounced
principally by strong arrivals from Asia. effect on overall tourism demand in some
“This poses a challenge for the tour- regional destinations.



MORE PAIN FOR REGIONAL HOTELS AS
CHINESE TOURISTS PREFER CITY OVER
COUNTRY: RBA (CONTINUED)

visitor nights), whereas Japanese visitors
have demonstrated a relatively stronger
preference for travel to Queensland’s
beach destinations, notably the Gold
Coast and tropical north Queensland,”
says the RBA.
According to the August Midwood
Report, Queensland regional and leisure
areas heavily dependent on overseas
tourists suffered big drops in revenue
when comparing the March quarter of
2011 with the March quarter of 2010.
Accommodation takings for Whitsunday
Island resorts were down 16% compared
with the same time last year, while takings
on Great Barrier Reef islands and adja-
“For instance, in 2010-11, Sydney and cent mainland areas (including the likes of
Melbourne were the most popular destina- Port Douglas) were down 21% over this
tions for Chinese visitors (as measured by time frame.

BURRAGA ISLAND ON THE NSW SOUTH
COAST SELLS TO CHINESE INTERESTS

B
urraga Island, a 121-hectare erry and the southern village of Terara.
Shoalhaven River island, sold for The purchasing entity gives its director
$2.5 million to Chinese interests in as the Shanghai-born property developer
late June 2011. Quan (David) Fang and its beneficial own-
It is one of a handful of privately owned ers as Beauty Castle Enterprises, a British
NSW coastal islands, hardly paradise, but Virgin Islands-based company.
its sale price ranks it among the many Although there appear to be no formal
tropical island counterparts. links, Fang is also a director of ASF Group,
It was sold recently, ending 34 years of the publicly listed company that operates
Kennedy family ownership of the island. in Australia and through subsidiaries and
It is about six kilometres up from the investments in controlled entities across
coastal Comerang Island, not far from the China, with a focus on mineral resources
Princes Highway, Nowra Bridge. It is set and energy, property marketing and travel
between the northern village of Bomad- services.



CHINA’S PROPERTY SLUMP BAD NEWS FOR
RESOURCES BOOM: ANZ

D
emand for Australian commodities
could take a hit if the cooling
Chinese property market QaItemporary
do not hold
.

continues to slump. residency visa but
According to ANZ’s China economists I wish to purchase
Li-Gang Liu and Zhou Hao, Chinese residential property
authorities have “been actively cooling Do I need to seek
an overheating property market for the approval?
last two years”, with both Chongqing and Yes. Applications
Shanghai “experimented with a property by foreign persons to
tax”. acquire residential
In addition, more than 20 first- and
real estate will be
second-tier cities (the major capital cities
approved if they
and secondary provincial capitals) have
meet the eligibility
imposed a “non-resident purchase restric-
criteria. If you are not
tion policy”, while an ambitious public
eligible for approval
housing program that aims to build 10 mil-
under the policy, then
lion affordable houses in 2011-2012 and
the acquisition is
36.5 million by 2016 is expected to sub-
generally considered
stantially reduce demand in the private
to be contrary to the
housing market in the foreseeable future.
national interest and
will not normally be
approved.

“These policies have hit the property
sector hard: transaction volumes have
declined significantly, first in the top-tier
cities, and then the second- and third-tier
cities. New property transaction volumes
declined by more than 30% in the first 10
months of 2011, compared with the same
period in 2010,” the bank says.
“In October, the economy witnessed the
biggest price decline since the introduc-
tion of the 70 city indices in January 2011:
new residential property prices in 33 cities
have declined on a monthly basis, while
prices in another 23 have remained flat,”
Li-Gang Liu and Zhou Hao report.



CHINA’S PROPERTY SLUMP BAD NEWS FOR
RESOURCES BOOM: ANZ (CONTINUED)

They warn that because the property property investment,” they say.
sector is a “central pillar for the Chinese “A slump in the property sector will have
economy” the impact of a slump on the significant repercussions for related indus-
economy would be compounded by the trial sectors… Key linkages include the
lack of an alternative growth engine and upstream industries of steel, cement and
the weak external demand for the foresee- building materials; downstream industries
able future. of automobile and home appliance; and
“There is a close link between property the intermediate sectors of banking and
sales and fixed asset investment, with a advertising,” say Li-Gang Liu and Zhou
weak property market leading to slower Hao.

QifIIam a foreign estate through an recently told that I wouldcompany or unit
.
bought real
national and was
Australian incorporated
not need approval

trust that has at least one Australian director or shareholder/unitholder. Is this
true?
No, and moreover, the FIRB would like to know the source of such advice so
that we can advise them accordingly. Australian incorporated companies or trusts
where 15% or more of the shares or units are beneficially held by foreign persons
are themselves considered to be “foreign” under the Act and policy. It is wise to
talk to the FIRB about particular structures before making any offers on property.



POINT COOK’S GOLDEN WATERS POPULAR
WITH CHINESE BUYERS

N
ewland’s Sanctuary Lakes
development in Point Cook, 30
kilometres west of Melbourne, has Qbefore apply a
Can I
.
finding
attracted considerable interest from Chi- property?
nese buyers, with 90% of buyers Chinese No, foreign
investors or owner-occupiers. investment approval is
The development launched in mid-2010 required for a specific
and has sold 90 of the 98 lots available. property you wish to
The final 14 lots were released in January acquire. You cannot
2012, and the civil construction was com- apply for a general
pleted in June 2011.
or ‘in principle’
Golden Waters is within the master-
pre‑approval.
planned 61-hectare Sanctuary Lake
community, designed around an 18-hole
Greg Norman-designed golf course near
a nature reserve and Port Phillip Bay. “With its prime location within the award-
Sanctuary Lakes has received a lot of winning Sanctuary Lakes, coupled with the
attention, winning the 2004 Greensmart proximity to the city at just 23 kilometres
Award, the National Environmental Excel- as the crow flies, Golden Waters offers an
lence award and the Australian Property ideal investment for the future, as well as a
Institute Development of the Year in 2004. coveted lifestyle choice for today.”
“Boasting uninterrupted vistas over the Developer Newland and home builder
sparkling lake network and beyond to Mel- Metricon are behind Golden Waters,
bourne’s city skyline, this is an incredible which also includes a pool, gym, sauna,
offering not to be missed,” says Newland massage facilities and tennis courts for
marketing manager Melissa Tilley. residents.



CHINESE INVESTORS EYE AUSTRALIAN
FARM PROPERTY

Qfamilyain Australia. Can I buy a second-
I am foreign person who regularly visits
.

hand property with a family member who is an
Australian citizen/permanent resident?
No. As a foreign non-resident, you are not
permitted to acquire any interest in second-hand
residential property, irrespective of whether you
purchase it solely in your name or jointly with
eligible persons (Australian citizens, permanent or
temporary residents).

A
delegation of Chinese investors chain that is available for them to use as
inspected several farming proper- a third party. The Great Southern region
ties in Western Australia’s Great ships through the Albany port zone.
Southern food bowl in August 2011. “The delegation was responsive, and
It included representatives of the Bei- farmers here like the idea. I have been
dahuang BDH Group, a state-owned fielding a lot of calls from farmers I know
company that has 5 million hectares in wanting me to introduce the delegation to
China’s Heilongjiang province. them,” he says.
The arrival of serious interest from Chi- So far the delegation has inspected
nese in agricultural land has divided local properties that are already on the market,
farmers and the WA Farmers Federation. and foreign investors already own one –
The delegation of about a dozen people, the Lake King property.
which included agronomists, farmers and “The Chinese take their food security
government officials, toured grain farms at very seriously. One of them told me they
Lake King and Ongerup with a local agent. produce 1.2 billion tonnes of grain and
Nearby Lake Grace farmer and WA that is not enough,” Clarke says.
Grains Group chairman Doug Clarke says “Where we only produce about 3% of
that he has had three meetings with the the world’s grain. We are very small in
delegation regarding investment in local comparison.”
agricultural land. The WA Farmers Federation has
“The Chinese buy or lease farms in expressed serious concerns about inter-
Brazil, Argentina, New Zealand and North est from China in 80,000 hectares of prime
Africa and in return they develop excellent Western Australian cropping land.
infrastructure,” he says. Federation president Mike Norton
Great Southern farmers have made it believes if a large swathe of farmland falls
clear to the Chinese they that want good under single ownership that many rural
port access and a sophisticated supply towns in the regions will disappear.



SOUTHBANK’S BANQUE88 SHAPING UP

C
hinese developer CBD is create note that for the ones they are intending
an unusually shaped 22-storey to rent out initially, in the long run they are
building in Southbank, in inner earmarked for family members, especially
Melbourne, called Banque88. Urban kids”.
Design Architects has designed the pro- He says the proximity to Crown Casino
ject, which will resemble New York’s has been a big selling point for Chinese
famed Flatiron building. buyers, and the marketing is designed to
The development is at 33 Clarke Street catch their attention.
but chose its name to be lucky in Chinese “Our marketing is heavily towards the
numerology. It is advertised in Chinese Chinese buyers in that the brochures are
newspapers, and about half of the 27 red (lucky), the number 88 is prominent
apartments so far sold have been to Chi- (even though it’s at number 33 Clarke
nese buyers. Street) and also the display building has
Paul Raimondo of Castran Gilbert, who red lanterns hanging up,” Raimondo
is marketing the property, says about half advises.
of the Chinese buyers are owner-occupi- Construction is expected to begin in
ers and half are investors. February 2012 and be finished in the mid-
However, he says, it is “interesting to dle of 2013.

MELBOURNE’S EASTERN SUBURBS
POPULAR WITH ASIAN BUYERS

A
sian buyers look set to increase suburb to attract interest from Asian buy-
their investments in Melbourne’s ers during the Chinese New Year season.
upper-middle-class eastern sub- “Glen Waverley has a very large Asian
urbs over the Chinese New Year period. community with varying financial means.
Popular suburbs include Glen Waverley Therefore we sell homes [to Asian buy-
and Balwyn, with a desire to own prestige ers] from $400,000 to $2.5 million,” says
property, feng shui alignment and access Moore.
to better schools among the reasons why Moore says most of the suburb’s Asian
Asian buyers have bought homes recently. buyers come from mainland China, Malay-
The Ray White Glen Waverley office has sia, Singapore and Indonesia.
recently sold a number of homes in the $2 “Often the grander the house, the bet-
million-plus price bracket to wealthy main- ter – financial status at the high end of our
land Chinese buyers. market is very important.
Director Damian Moore expects almost “But you can’t beat good old ‘feng shui’
every property currently up for sale in the – most buyers will consider direction of



MELBOURNE’S EASTERN SUBURBS
POPULAR WITH ASIAN BUYERS
(CONTINUED)

the home, adjacent streets, low side/high than $100 million in buying Melbourne

Qvisa validbusiness
I have a
.
for three
side, front door opposite back door, stair-
case facing the front door,” he explains.
development sites in the past 18 months.
Last year Asian developers snapped
years, but it only About 14 kilometres west of Glen up a 3,200-square-metre site at 224-250
allows me to stay for Waverley, the affluent suburb of Balwyn La Trobe Street for $29.2 million with
periods up to three has also experienced an influx of Asian potential for more than 500 apartments
months at a time. Am buyers wanting to own property in the while Singapore construction and prop-
I eligible to buy an Balwyn High School zone bounded by the erty group Chip Eng Seng bought an
established (second- Eastern Freeway and Whitehorse Road. 8,000-square-metre office building on a
hand) dwelling? According to Tim Heavyside of Fletch- 900-square-metre block at 150 Queen

No. You must be ers Real Estate, property purchases by Street for $25.5 million, with plans to con-

living in Australia aspirational Asian families have increased vert it for residential use. Both deals were
from an average of 20% of Balwyn home negotiated by Savills.
(not just visiting or
buyers in the zone 10 years ago to about Another residential development site at
staying for short
60% of all purchasers currently. 420 Spencer Street (2,250-square-metre
periods of time), and
“They may decide rather than invest site with a permit for 368 apartments)
your temporary visa
$25,000 in school fees every year, I’ll uti- has registered interest from Asian buyers
must allow you to
lise that in travel and educate my child in including SP Setia and Mammoth Empire
stay in Australia for a
life, but they still get the benefit of being Holdings, both from Malaysia, as well as
continuous period of
at the fourth-best school in the state,” private developers from mainland China.
more than 12 months.
Heavyside says. In total more than half of the 17 proper-
According to Moore, selling to Asian ties sold by Savills since March last year
buyers comes with its challenges. with residential development potential
“Most Asian buyers are very hard nego- were snapped up by Asian buyers.
tiators – they remain non-emotional about According to Savills divisional direc-
the purchase and must always feel in con- tor of CBD sales and investments Nick
trol,” he says. Peden, Asian developers have bought
Melbourne real estate is not just proving eight properties, averaging $12.5 million,
popular with Asian families – Asian com- since March 2010.
panies are also entering the market. “Melbourne offers sustained population
Asian property developers are making growth, inexpensive land compared to
major plays in the Melbourne apartment home markets, the potential for significant
market, with Hong Kong-based Far East growth, the benefit of freehold title, and its
Consortium building 2,600 apartments in stature as the world’s most liveable city,”
the billion-dollar Upper West Side project says Peden.
on Lonsdale Street. Investors in the pro- In a recent report on the influx of Asian
ject come from Malaysia, mainland China, property developers, CBRE said Mel-
Korea and India. bourne was proving more popular with
Savills reported late last year that foreign developers than Sydney due to
investors and developers from China, larger sites being available on the north-
Singapore and Malaysia had spent more ern edge of the city.



HOW TO UNDERSTAND CHINESE
BUYERS: ANDREW TAYLOR

A
manda Sun bought three houses to do so soon. These percentages account
worth a total of $3 million on the for huge numbers of individuals, because
Gold Coast after visiting just once China has the fourth-largest number of
as a tourist. high-net-worth individuals in the world.
Sun is Chinese, 33 years old and owns Each year the cohort grows by nearly
a small trading firm, according to a recent 10%.
news story. She is typical of the Chinese Many of those rich Chinese emigrants
buyers who have rescued many Austral- are coming to Australia. China sent more
ian developers, agents and vendors from immigrants to Australia in 2010 than any
deeper price cuts and longer selling times other country, including the UK and New
in recent years. Zealand.
Even as they sink roots into Australia,

Qa unit in a retirement village here in Australia
. My foreign citizen parents want to move into rich Chinese like Sun are also keeping
a presence in China. For example, pub-
to be near our family. They won’t actually own the lished research shows that about 80%
unit – they will have a ‘lifetime’ lease permitting plan to keep their Chinese passports.
them to live in the unit. Will they need approval? It is common for the wife and child to live
Yes, they will need approval for the acquisition of abroad, while the husband spends most of
the lease (because the term of the lease is more than his time in China. Chinese émigrés might
five years). still run businesses in China.
They are usually moving abroad for
their children. They believe that Western
Less than 12 months ago, the Chinese schools and universities are better than
government got a shock when the results their Chinese counterparts, and that living
of a comprehensive survey of high-net- overseas will give their children an advan-
worth Chinese like Sun were released. tage in life.
The two organizations behind the sur- Foreign residency could also be use-
vey are very respectable, Bain & Co and ful in case China goes through policy
China Merchants’ Bank, so the results shifts, like massive new wealth taxes or
can’t be written off as a fluke. social unrest. China is a rapidly chang-
The survey revealed what many Aus- ing country. Riots, strikes and protests
tralian agents had already been feeling: recently doubled over the last five years
rich Chinese, for various reasons, want to to 180,000.
get out of China, and they believe buying Emigration and educating children are
property in Australia and other countries just two of the reasons wealthy Chinese
enables their escape. are buying property in Australia. The third
Not just a few rich Chinese want out. is for investment.
A full 57% of rich Chinese have con- As Sun puts it, Australia’s “legal system
templated emigration. About 20% have is better”. She plans to migrate to Australia
actually completed immigration proce- to live in one of her new homes. She will
dures in countries like Australia or expect find renters for the other two.



HOW TO UNDERSTAND CHINESE
BUYERS: ANDREW TAYLOR (CONTINUED)

Australian property is an attractive
investment in its own right, with credible
economists predicting prices will be 55% Qperson and I want
I am a foreign
.

higher in 10 years. to buy a transportable
It also represents a diversification of home in a caravan
risk. Instead of only investing in property park. Even though I
in China, they put some of their money won’t be acquiring
overseas so they don’t lose everything if any land with this
the Chinese property market goes down. proposal, do I need
Buyers like Sun have made a real approval?
impact on the Australian property market. You will need
As one agent told the Sydney Morning approval if you enter
Herald about Chinese buyers, “They’re a lease for the site in
the only ones that have got the big dollars the caravan park for a
at the moment”. period in excess of five
The Financial Times has reported that years.
Chinese buyers account for 20% of all
purchases in Sydney. This may be an
overestimate, but it reflects the trend. Chinese buyers enabled the company to

They tend to seek out property that has keep up production rates in Melbourne

water views or is close to the ocean or and Sydney through the GFC.

major universities and CBDs. “We build between 1,300 to 1,500 new

Many developers depend on Chinese apartments each year in NSW and south-

buyers for their off-the-plan unit sales. east Queensland,” Spira says.

Chinese parents often buy Australian Schwartz reckons, “You are not doing a

apartments for their children to live in good job at selling real estate in Australia

while studying. today if you’re not marketing to the Chi-

At the Stamford Residences, a 30-level nese buyer”.

tower at The Rocks in Sydney, one buyer Chinese buyers also make their mark

recently bought a $2 million apartment on the higher end of the market. Just

to serve as this sort of student housing. this month, a luxury penthouse at Lumi-

Mainland Chinese buyers snapped up ere Residences in the Sydney CBD was

about six of the building’s 122 apartments. reported sold for $8.1 million to an Asian,

In Melbourne, developer Morry possibly Chinese, investor.

Schwartz of PanUrban says, “Chinese But, while new developments and lux-

buyers, both local and from Asia, account ury properties grab the headlines, the

for about 60% of enquiries and purchases overwhelming interest I see is from Chi-

at Pan Urban’s developments. That’s up nese buyers enquiring about affordable

substantially from a few years ago.” second-hand property in good locations.

Meriton general manager Peter Spira ANDREW TAYLOR,
told the Australian Financial Review that FOUNDER, JUWAI.COM



ASIAN BUYERS VITAL TO AUSTRALIAN
PROPERTY MARKET: MORRY SCHWARTZ

A
sian buyers are vital to the success developers in the US, Australia, Canada,
of future residential developments the United Kingdom and Japan.
and developers must engage Schwartz says there a “huge need” for
with them, says Morry Schwartz, head of such a site.
Melbourne-based property developer Pan “Australian agents are looking for buy-
Urban. ers, and Chinese buyers want to spend
Speaking to Property Observer, billions on Australian property. But getting
Schwartz says Chinese buyers from coun- the two groups together before Juwai cost
tries like Malaysia and Indonesia see a a fortune.
country like Australia as a safe haven for “Agents had to travel to China for prop-
the long term. erty expos, hire Mandarin-speaking staff
“Sometimes Chinese people who are or to split their commissions with Chinese
living in Malaysia or Indonesia feel slightly agents — none of which is affordable in
insecure about buying where they live this marketplace.”
because there may be anti-Chinese senti- Taken as a group, local and offshore
ment in those countries,” he says. Asian buyers currently account for about
Schwartz also believes Australia offers 60% of enquiries and purchases at Pan
a more stable investment option than Urban’s developments – “up substantially
mainland China. from a few years ago,” Schwartz says.
“In mainland China there is a strange
political combination of capitalism in a
socialist environment, not necessarily the
most stable.
Qresident and my
I’m a foreign non-
.

“People, who have wealth – some of spouse is an Australian
them great wealth – worry about national- permanent resident. If
ism,” he says. we’re buying a house
Furthermore, while Australian investors together, do I require
tend to be more insular in nature and are approval?
not inclined to buy an apartment in Hong Yes. Even though
Kong, Schwartz says Asian buyers don’t your spouse doesn’t
think it’s strange to buy in countries like require approval,
Australia or Canada. you are still required
“And there is the education factor. Par- to seek foreign
ents like to buy an apartment for their child investment approval
who is studying at RMIT,” he says. and submit an
His comments following the launch application. Approval
of Juwai.com, promoted as the world’s will be granted
largest international property search and according to the
information platform for Mandarin-speak- relevant eligibility
ing Chinese consumers. criteria.
The site has more than 1 million prop-
erty listings from over 80,000 agents and



AZURE DEVELOPMENT DRAWS CHINESE
INTEREST

square metres and start at $480,000,
and two-bedroom apartments range from
82 square metres to 107 square metres
and start from $638,000. Three-bedroom
apartments start at 134 square metres
and $998,000, and three-bedroom town-
houses range from 127 square metres to
136 square metres and are priced from
$1.23 million.
The project’s property manager esti-
mates that about 40% of attendees at
open for inspections have been prospec-
tive Chinese owner-occupiers, with about
5% Chinese investors. Of the about 100

A
sold so far, about 35% have sold to Chi-
zure, a new development by nese owner-occupiers and 5% to Chinese
CBRE and BridgeHill in the investors.
Sydney suburb of Rhodes, is Azure is being advertised in Chinese
attracting interest from Chinese buyers, Herald Property Weekly and Chinese
primarily owner-occupiers. Sydney Property Weekly in order to target
The waterfront development will feature this market.
169 studio, one-, two- and three-bedroom The interiors were designed by award-
apartments and three-bedroom town- winning SJB Architects, and the units
houses across four waterfront buildings. surround a garden square.
Studio apartments start from 40 square Construction began in early 2011 and is
metres and $385,000, one-bedrooms expected to be finished in September or
range from 54 square metres to 67 October this year.



CHINESE INVESTMENT IMPORTANT FOR
AUSTRALIAN PROPERTY: TED BAILLIEU

V
ictorian Premier Ted Baillieu has 121-hectare Shoalhaven River island, for
moved to allay fears about the about $2.5 million.
impact of increasing Chinese In August 2011 Baillieu unveiled a strat-
investment in Australia as he embarked egy of Victoria increasing the promotion of
on a trip of China in September. its agricultural, manufacturing and finan-
He says the Foreign Investment Review cial services in China.
Board is protecting “strategic interests”. Bailleu says Chinese investment should
“Obviously the investment review board be welcomed as it will help farmers sell
is in charge of these issues. Suffice to say their products in the second biggest and
work is being done so that we can keep an fastest growing economy in the world.
eye on our strategic interests, and I think “I don’t think we should be shy in any
that is a good thing,” Bailleu says. way ... about investment in Victoria,” he
Approved Chinese investments in Aus- says.
tralia have totalled an estimated $60 billion In a speech at the Australia-China
since late 2007, including the purchase of Business Week forum in August, former
farms, wineries and office towers. premier of Victoria John Brumby said
This year, Chinese investment firms China’s investment in Australia must be
have continued buying up both rural prop- viewed as an opportunity, not a threat.
erties and offices. “The Australia-China Business Council
Recent transactions include Chinese has shown that trade with China generated
conglomerate HNA Group purchasing the the equivalent of $10,000 per Australian
1 York Street office tower in the Sydney household in the past year alone. So this
CBD for $117 million from Colonial First is, by any measure, an important relation-
State. ship,” Brumby said.
Chinese investors also bought the
Capercallie vineyard in the NSW Hunter
Valley for about $2 million, and another
Chinese group bought Burraga Island, a

Qapproval. Can I still submit an application for
I have been told that the developer has pre-
.

individual approval?
No. The FIRB does not issue individual exemption
or approval letters if approval is not required.
The developer must provide you with a copy of the
pre-approval letter, which you should keep with
your records. You should only apply for individual
approval if the developer’s pre-approval is not valid
– for example, if the dwelling is no longer new, or if
you are not purchasing it from the developer named
in the pre-approval letter.



POINT PIPER ON THE CHINESE TOURIST
ROUTE FOR INSIGHT INTO THE PRIVILEGED
LIVES OF COMMUNIST PARTY PRINCELINGS

T
here’s apparently a new addition correct order) businessman Zeng Wei,
for sightseeing Chinese tourists and his wife, Jiang Mei, were examples of
when they visit Sydney. the opportunities open to foreign investors
Not just cuddly koalas and the Opera in the right visa class.
House – they have added driving along “Mr Wei’s father, Zeng Qinghong, was
Wolseley Road, Point Piper for a glimpse vice-president of China between 2003 and
of the $32.4 million property owned by a 2008 and the fifth-ranking member in the
son of a former vice-president of China, Politburo Standing Committee,” the SMH
according to a Wall Street Journal report. and The Age report noted.
Set high on a hill, above a towering “In 2008, the couple paid $32.4 mil-
Architect’s impression: Gergely & Pinter sandstone wall and overlooking Sydney lion for Craig-y-Mor in Point Piper, the
Architects Harbour with picture postcard-perfect third-most expensive house ever sold in
views of the bridge, Craig-y-Mor, the Point Australia. The purchase was made after
Piper non-waterfront residence, is owned he obtained a business migration visa the
by Zeng Wei and his wife, Jiang Mei. year before.
The 2008 purchase was made just in “The grand 1920s house with renova-
the name of Jiang Mei. Quietly during tions by Professor Leslie Wilkinson was
2009, the name of the Zeng Weo was sub- initially bought just in his wife’s name, as
sequently added to the title. was an earlier acquisition - a $1 million
By late 2009 the couple were seeking its apartment in the World Tower block in Liv-
demolition, to be replaced by a $5 million erpool Street in the CBD in 2005.
new home (architect’s impression at left), “The couple’s application to demolish
so they were both named for the first time the house and replace it with a new $4.95
in the much-anticipated end-of-year Syd- million home is being reviewed by Wool-
ney Morning Herald Title Deeds Christmas lahra Council, which is seeking heritage
party column. It quickly sparked specula- advice,” the newspaper reported in an
tion in Chinese internet chatrooms. article by then property editors Jonathan
Despite their names being published Chancellor and Marika Dobbin.
in an incorrect order and the restrictions The couple won planning approval on
on Baidu, the Chinese internet search Christmas Eve 2010.
engine, the web was soon alive with They currently have lodged an amend-
chatter linking Wei to his father, Zeng ment seeking modifications for an extra
Qinghong, the former vice-president of tunnel excavation, this one to provide
the People’s Republic of China between access to the pool and gym area.
2003 and 2008, and once one of the most The WSJ noted the elder Zeng, long
powerful men in the Chinese Communist the right-hand man to former president
Party. Jiang was noted for studying at the Jiang Zemin, was a member of China’s
Beijing Dance Academy and, following a peak political body, the Politburo Standing
stint in television, at the Chinese property Committee, for five years and before that
developer Renhe Group. headed the powerful Organisation Depart-
In April 2010, the Fairfax press pub- ment, which is responsible for deciding
lished confirmatory details noting (in who gets which political posts.



SINGAPOREAN INVESTORS BUYING OFF THE
PLAN IN PERTH

S
ingaporean investors have spent
more than $11 million buying
apartments off the plan in Fraser’s
new residential project in Perth.
The development known as QIII is part
of Frasers’ Queens Riverside Hotel + Res-
idences development, which will offer 408
luxury apartments in three buildings and a
236-room all-suites hotel operated under
the Frasers Hospitality brand.
Frasers ran a series of seminars in Sin-
gapore in November promoting the project
to local buyers and attracted “exceptional
interest” as well as sales of $11.1 million,
according to CEO Guy Pahor.
The 26-storey apartment building will
feature 265 apartments, of which 125
have been sold. Many of the Singaporean QIII will be the second stage of the
buyers purchased with the intention of development, which is being built for
upgrading from their existing Perth proper- Frasers by Diploma Construction. The
ties as the time draws closer to completion first stage, the $107.5 million construc-
of QIII. tion of Fraser Suites Perth plus common
Apartments are selling for about basements and podium for the Queens
$730,000, with $1.4 million the top price Riverside precinct, is now underway.
achieved to date. It was for a three-bed- Construction of QIII will commence in
room apartment on the 21st floor. early 2012 and finish in January 2014.



APARTMENT PRICES COULD FALL IF
CHINESE BUYERS PULL BACK:
ROBERT GOTTLIEBSEN

Chinese buyers were buying Australian
Q. I did not know I apartments as part of efforts to have some
needed approval and of their funds outside of China “as a risk
have already entered hedge”.
an unconditional “But there are now much greater liquid-
contract to purchase ity pressures at home, and those that
property – does that bought when the dollar was around $1.08
mean my contract is are showing a 10% loss.
invalid? “At the moment, there are a great many
No, the contract apartment towers being built in Sydney

remains valid, but and to a lesser extent Melbourne, where

by entering an the mainland Chinese have bought off the
plan, usually with a 10% deposit.”
unconditional contract
“Australia’s largest apartment devel-
you have breached
oper, Harry Triguboff, has confirmed that
the FATA. You should
Chinese buying of inner-Sydney apart-
submit a retrospective
ments has halved in the last month. The
application. If you
China squeeze on its property market and
meet the eligibility
fears about the level of our dollar are now
criteria, retrospective
having a direct effect on the Australian
approval is generally
dwelling market,” he says.
granted (that is, no “Triguboff believes that the sharp cut-
action will be taken back in Chinese apartment demand will
with respect to the probably reduce apartment prices in Syd-
breach as long as ney by about 10%, but the prices will not
you comply with the collapse. He believes that a fall in apart-
standard conditions). ment prices will flow on to the whole
dwelling market in Sydney.”
Liquidity pressures back home and a “Triguboff says so far all Chinese buyers
weaker Australian dollar could cause Chi- have honoured their agreements but no
nese buyers of off-the-plan apartments in one can be sure which way the Chinese
Sydney and Melbourne to withdraw their will jump if the global crisis intensifies. If
offers, Business Spectator’s Robert Got- they failed to honour their agreements,
tliebsen warned in November 2011. then apartment prices would almost cer-
Gottliebsen says mainland Chinese tainly fall by more than 10%.
investors have been the primary buyers “The Chinese apartment pullback and
of Sydney apartments in recent times, the European bank withdrawal plus the
investing about $2 billion a year in Syd- truly astounding events in Europe – where
ney. He says they are also major buyers in (in the words of Westpac’s London man
Melbourne, taking their annual investment James Shugg) the world is watching a
rate to about $3 billion. train wreck taking place in slow motion –
Before the global deterioration, he says is going to intensify the pressures on the



APARTMENT PRICES COULD FALL IF
CHINESE BUYERS PULL BACK: ROBERT
GOTTLIEBSEN (CONTINUED)

Reserve Bank to reduce interest rates a “If Australians can’t get bank finance
lot further. to buy apartments and the Chinese with-
We are not on the front line, but the drawal intensifies, then we will see even
missiles have reached our shores,” says greater pressure on dwelling prices. This
Gottliebsen. is not a forecast, but when banks push
While Chinese buyers have started pull- prices up via their lending policies and
ing back, Gottliebsen says lower interest then push them down with different poli-
rates and the lift in rents has started to cies, then they have only themselves to
rekindle Australian interest in apartments, blame for any losses,” Gottliebsen says.
which will be helped by the lower prices. “Of course, in the apartment market
He highlights Triguboff’s fear the Aus- local councils and state governments
tralian banks may be on the way to have taken actions that have increased
“engineering their own train crash, albeit the price of apartments by about 15%.
nothing anywhere near as serious as the “If the councils and other bodies made
European disaster”. the rules for approvals straightforward and
“Australian banks – having been the made their building requirements fit into
main driver of higher house and, to some economic construction methods and mar-
extent, apartment prices – are once again ket demand, then apartment costs would
lowering the values of dwellings in deter- fall,” he says.
mining how much they will lend. While the This would enable Australians to buy
Chinese were buying apartments that did them, but might affect the values of exist-
not matter, although it has contributed to ing apartments.
a large number of unsold houses in most There will be many twists in this tale,
capitals. some of them rather unpleasant.”

Qinvestment approval when I boughtfor foreign
I was unaware of the requirement
.
some
land about six months ago to build a house and
recently a friend told me that I may have breached
the requirements because I should have obtained
approval prior to purchasing the property. What
action will the government take against me now?
Action will depend on whether your acquisition
would have been approvable under the current
guidelines. Worst case scenario: where it is
considered inconsistent with policy you may be
ordered to sell the land within a certain time.
Provided you sell within the required time,
prosecution is unlikely though details of the breach
will be sent to the immigration authorities for any
action they deem necessary.



UNDERSTANDING THE FOREIGN
INVESTMENT REVIEW BOARD

T
he Australian government seeks to ensure
that foreign investment in residential real
estate increases the supply of dwellings and is not
speculative in nature.
Residential real estate means all Australian
residential land and housing other than commercial
properties (such as, offices, factories, warehouses,
hotels, restaurants and shops) and rural properties
(that is, land that is used wholly and exclusively
for carrying on a substantial business of primary
production).
Foreign persons are prohibited from acquiring
established dwellings for investment purposes,
including holiday homes, irrespective of whether
they are temporary residents in Australia. However,
temporary residents can apply to buy one established
dwelling to use as their residence in Australia.
Approval is usually provided subject to a condition
that the temporary resident sells the dwelling when it
ceases to be their residence.
If you are applying to purchase residential real
estate, you can submit an application through the
online system.
Certain acquisitions do not require notification
or approval under the Foreign Acquisitions and
Takeovers Act 1975. New dwellings acquired off the
plan are normally approved where the dwellings have
not previously been sold.
There are no restrictions on the number of such
dwellings in a new development that may be sold to
foreign persons, provided that the developer markets
the dwellings locally as well as overseas (that is, the
dwellings cannot be marketed exclusively overseas).
A property purchased under this category may
be rented out, sold to Australian interests or other
eligible purchasers, or retained for the foreign
investor’s own use. Once the property has been
purchased, it is second-hand real estate and is
subject to the restrictions applying to that category.



UNDERSTANDING THE FOREIGN
INVESTMENT REVIEW BOARD
(CONTINUED)

Foreign persons should determine whether their
proposed acquisition is exempt and if in doubt, seek
legal advice.
You do not need to submit an application for
approval to acquire real estate in Australia if:
• you are an Australian citizen living abroad;
• your spouse is an Australian citizen (not
a permanent resident) and you are purchasing
residential real estate in both names as joint tenants
(not tenants in common);
• you hold a permanent resident visa and you
are purchasing residential property;
• you are purchasing new dwelling(s) from the
developer, where the developer has pre-approval to
sell those dwellings to foreign persons;
• you are acquiring an interest in developed
commercial property where the property is to
be used immediately and in its present state for
industrial or non residential commercial purposes;
• you are acquiring an interest by will or by
operation of law (such as, a court order regarding
the division of property in a divorce settlement, but
not if both parties simply agree to transfer property
without a court’s intervention); or
• you are purchasing property from the
government.
Source: Foreign Investment Review Board

P roperty Observer readers who wish to ask more
specific questions should do so via:
The Foreign Investment Review Board
C/- The Treasury
Langton Crescent
Parkes ACT 2600, Australia
Telephone Inquiries +61 2 6263 3795 (9:00 am –
12:30 pm and 1:30 pm – 5:00 pm AEST, Monday to
Friday, excluding public holidays)
Email: firbenquiries@treasury.gov.au



CHINESE APPETITE FOR GOLD COAST
PROPERTY SOARS TO RECORD HIGHS:
COLLIERS

C
hinese buyers accounted for
nearly a third of foreign purchases Q. Can you give
of Queensland residential real me an example of a
estate during the 2010-11 financial year, ‘condition’ to include
with record amounts spent on Gold Coast in the contract?
property, according to research compiled ‘This contract is
by Colliers International. subject to foreign
The Gold Coast was China’s preferred investment approval.
local authority during the 2010-11 year, If such approval is
and they spent a total of $66.9 million not obtained within
(40% of the total amount spent by for- 40 days, this contract
eigners) in the area. This was followed is terminated and all
by Brisbane with $30.4 million and Logan monies deposited will
with $4.8 million. be refunded.’
Gold Coast figures for 2010-11 were
128% higher than the previous year, when
Furthermore, with two expanding inter-
Chinese buyers spent $29.3 million – the
national airports – Brisbane and the Gold
largest amount spent by Chinese buyers
Coast – close by, it is easily accessible
in a single year since Colliers began to
both domestically and internationally.
monitor foreign investment figures.
In December 2011, China Southern air-
line announced it would launch up to four
direct flights a week between Coolangatta
and the Chinese city hub of Guangzhou
by 2015.
“Within five years China is expected to
eclipse New Zealand as the Gold Coast’s
number-one tourism provider,” Holland
says.
“With continued strong tourism, the
popularity of the Gold Coast with foreign
buyers is encouraging and, with the cur-
rent stock of new apartments now down
to a 10-year low, these figures should
provide developers with confidence to
commence new projects over the coming
12 months,” he says.
Tony Holland, Colliers International
While overall foreign investment in the
Gold Coast director of project marketing,
Queensland has declined since the GFC
says the Gold Coast is a favoured desti-
(the 2007-2008 financial year), Chinese
nation for Chinese and other foreigners
buyers have not been deterred, spending
because of its year-round sunshine and
almost $107 million in the state’s property
attractive lifestyle opportunities.


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