Did you know that Chinese investors account for about two percent of Australian residential and commercial real estate purchases, and this market is growing to the point that China is becoming one of Australia’s leading international investors?
In fact that two percent is the equivalent of an approximate $24.3 billion in the 12 months ended June 30, up from $12.4 billion a year earlier and $5.9 billion in 2013, according to the Foreign Investment Review Board’s annual report.
The US remains the second largest foreign investor in Australia after pumping in $25.1 billion during the period, which is up 44 per cent from a year earlier.
In 2015, China had more billionaires than the U.S. for the first time in history. This shift combined with Australia’s low dollar, makes it easy to see why China is becoming one of our strongest investors. For Chinese investors, Australia is a stable long-term investment plus it allows parents of students who are completing their tertiary education to get a footing in the country when they graduate.
Before you start targeting these overseas investors, however, here are some things to consider.
Understand and Explain Laws and Limitations
Due to current Australian law, overseas buyers cannot purchase property without following these government rules and regulations:
- Overseas buyers must get Foreign Investment Review Board approval
- There are limitations on purchasing existing property
- Buyer fees begin at $5,000
- Stamp duty must be paid (the fee is higher for foreign investors )
- When it comes to capital gains, foreign investors must pay a higher capital gains tax
- There are limitations on the number of apartments one can buy in a single development
In addition to following these regulations, foreign investors are typically only offered a loan of 70 percent of a property’s value from lenders.
Before you start targeting Chinese investors, you must understand the limitations and regulations and be able to fully explain them.
Pinpoint What Chinese Buyers Want to Purchase
Most Chinese investors have a generous investment budget and are looking at high-end properties. Typically, they want property that is close to public transport, highly rated schools, shops, and parks.
You’ll find that modern, easy-to-maintain styles are highly attractive because they allow buyers to quickly move in or lease to a tenant.
Sydney and Melbourne are popular cities for Chinese investors, but Perth, the Gold Coast, and Adelaide are also attracting more and more investors.
You should be aware that some Chinese buyers adhere to certain cultural beliefs about buying property, such as avoiding certain numbers or taking into consideration the position of windows and doors. At the end of the day, you’ll have to sell the value of the right property, for the right price, in the right location.
How to Target Chinese Investors and Buyers
Create a long-term strategy for how you’ll attract Chinese investors and buyers. Think through how you’ll generate leads and then nurture those leads. Here are a few ways you can target and attract buyers:
1. Chinese Social Media Sites
Some real estate agents post listings to Chinese social media sites. The social media site “Weibo” or Sina Weibo is the Twitter of China, except that it has over twice as many users as Twitter. “Renren” is essentially the Facebook of China. “Youku” is similar to YouTube and is the second largest video site in the world, following YouTube.
2. Chinese Messaging Apps
“WeChat” is a popular messaging app in China and many Australian real estate agents are using this app to reach out to potential buyers and sellers.
3. Partner with Chinese Property Portals
Another strategy you can use is to partner with Chinese property portals where you can post new listings such as “myfun“, “ACProperty“, “GiFang” and “AOFun” . This helps you quickly reach the market and ensure your messaging is on point.
With iDashboard you can easily upload your properties to these Chinese property portals, simply sign up with your chosen websites and they will contact us to enable your property feeds through to them. From then on any new properties or updates you make will automatically go through to those websites, along with any other portal sites you upload your properties through to.
When you’re selling to the Chinese market, you should expect a lot of questions, because most buyers will be purchasing without seeing a property in-person. Comprehensive information, including effective floorplans and highly professional property photographs, is a must to have on hand, so you can send it through. You might also consider integrating your real estate videos into your strategy as well as walk through videos.
You’ll also need to decide beforehand whether or not it’s important to you to have well-translated documents or if you anticipate most of your target buyers will speak English as well. If you do need translated documents, you can enlist the help of a quality translator or translation service.
When it comes to targeting Chinese buyers, you shouldn’t just decide one day that you’re going target them and go for it. You should determine which platforms you’ll use to reach these buyers and have a plan in place once you start attracting them.
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