CHINESE buyers losing faith in their own property market are looking to Brisbane for a safer investment – and they have expensive taste.

Singapore might be the home of ‘Crazy, Rich Asians’, but new data reveals some of the Queensland capital’s most exclusive suburbs are attracting the attention of deep-pocketed investors from China with money to burn.

The research by Chinese international real estate website, Juwai.com, shows Kangaroo Point had the highest number of inquiries from Chinese investors in the first half of 2018, followed by Newstead, Sunnybank, South Brisbane, Indooroopilly and Ascot.

That’s in contrast to Chinese demand for property in Brisbane in the first half of 2017 when the outer suburbs of Calamvale, Park Ridge and Rochedale were the most popular.

Juwai.com chief executive Carrie Law said the top suburbs list revealed the importance of new development, education, and convenience to Chinese buyers.

“Brisbane is attractive due to its easy lifestyle, beautiful water views, and quality English language educational institutions,’ Ms Law said.

“If you have a moderate, high-rise apartment in Brisbane, you can generally snap a beautiful selfie at the window or on the balcony

with gorgeous water or district views in the background to show off to your friends at home in China.”

Ms Law said suburbs with new developments or large numbers of new house and land packages for sale were also in demand.

“Because of foreign investment rules, offshore buyers are pushed into new property to support the construction of new housing,” she said.

“That explains why Newstead and Kangaroo Point are on the list. There is plenty of new development underway and our buyers are curious about it.

“It is a revelation for Chinese buyers that they can obtain a new house on its own land in Brisbane for about half the price of an inner-city apartment in Shanghai or Beijing.”

Last week, protesters ransacked a number of new apartment sales offices in China angry their investments were being sold for much less than they paid for them.

The unrest is a further sign China’s property market is beginning to cool, prompting investors to turn to places like Brisbane.

“Brisbane feels like a safe, desirable place to live,” Ms Law said.

“It often starts with a property purchase for sending a child to study or work in Brisbane. “Over time that can lead to additional

investments, starting local businesses, and eventually the whole family moving to live in Brisbane.

“These buyers look for established homes with land and relatively new or like-new construction in areas with good schools for proximity to good private schools or universities.”

Brisbane is the third most popular city in Australia among Chinese property buyers.

It ranks just below Melbourne and Sydney and just above Adelaide and the Gold Coast.

Chinese buyer demand for Australian property remains strong, increasing 10.1 per cent in the first quarter of 2018 and 4.4 per cent in the second.

But it’s a more sustainable growth rate than what the country experienced in 2016 when there was a massive run-up in Chinese demand for Australian property.

Zhen Luo and his fiancee, Yihan Lin, have just bought their first home in Sunnybank Hills, which is one of the most popular in Brisbane among Chinese buyers.

The couple from China had been looking for about six months, but eventually settled on a townhouse in the suburb with the help of Belle Property Calamvale.

Mr Luo said he thought Australia, particularly Brisbane, was a safer place to invest in property than China at the moment.

He said Sunnybank Hills was attractive because of its convenience, its proximity to shopping centres and the fact it was within the Sunnybank Hills State School catchment.

In Bardon – one of Brisbane’s most desirable suburbs – one of two architect-designed homes dubbed the Minka Twins has just sold for $1.888 million – 8 being the luckiest number in Chinese numerology.

Sold to an Asian family, the house is one of two still under construction in the suburb.

Marketing agent Di Anderson of Position Property said the new owners had two young children attending Brisbane Grammar, and were keen on securing a home that would suit Brisbane’s subtropical climate.

“They were keen to purchase prior to completion to ensure they secured the property,” Ms Anderson said.

“As a result, the developer agreed to a small discount for buying during construction.”

TOP BRISBANE SUBURBS FOR CHINESE BUYERS IN H1 2018

1. Kangaroo Point
2. Newstead
3. Sunnybank
4. South Brisbane/West End
5. Indooroopilly
6. Ascot
7. Sunnybank Hills
8. St Lucia

TOP BRISBANE SUBURBS FOR CHINESE BUYERS IN H1 2017

1. Fortitude Valley
2. Calamvale
3. Macgregor
4. Hamilton
5. Park Ridge
6. Rochedale
7. East Brisbane
8. Russell Island

(Source: Juwai.com, ranked by number of purchasing inquiries)

Courier-Mail/ OCTOBER 21, 2018

The Reserve Bank’s statement accompanying the October interest rate decision, where rates were kept on hold at 1.5 per cent, provided a mixed assessment of the Australian economy.

While the RBA was optimistic about economic growth and the jobs market, the RBA highlighted the risks surrounding household debt, slow income growth, tighter credit conditions and global trade.

The RBA maintained the key line that “further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual”.

However, there were three key developments in September that will remain top of mind for the board as they ponder their next move.

Banks are raising – but also cutting – home loan rates

While the cash rate hasn’t changed in more than two years, banks are adjusting their home loan rates . Most banks, excluding NAB, recently increased owner-occupier home loan rates for existing customers. But banks are also cutting rates for new home loan customers to try to capture market share. As a result, home loan rates for owner-occupiers haven’t changed much overall. For investors, interest rates have remained fairly steady overall in 2018 but have fallen for new customers. The RBA noted that while credit conditions are tight, “mortgage rates remain low and there is strong competition for borrowers of high credit quality”.

Total housing credit growth slowed to a 5.4 per cent annual increase, the slowest rate since 2013. The combination of investors withdrawing from the market as prices fall and tighter lending by the banks has meant property investor credit growth has fallen to a record low level.

The risk of a US-China trade war has increased

One of the biggest threats to the Australian economy is a possible trade war between the US and China. The RBA maintained the line that “one ongoing uncertainty regarding the global outlook stems from the direction of international trade policy in the United States”.

The escalating trade – and diplomatic – dispute between the US and China could affect Australia through a few channels. A trade war would reduce Chinese demand for our exports, particularly commodities such as iron ore. This would impact Australia’s economy as China is Australia’s largest export destination and trading partner (see graph below). A trade war may impact global growth and global supply chains by slowing trade and pushing up prices, as well as affecting US-Australia trade and battering global confidence.

The RBA modelled three trade-war scenarios earlier this year, with its worst case scenario a 20 per cent tariff on all US imports and a 20 per cent tariff on US exports by all other countries. The RBA predicted that a large-scale trade war would increase Australia’s unemployment rate and lower economic growth, but that a lower exchange rate and a lower cash rate rate would help to insulate Australia’s economy.

Strong economic growth masks some underlying weakness

Australia’s GDP growth over the year to June was 3.4 per cent, the fastest rate since 2012. But the headline figure masks some underlying weakness.

Households are saving less of their income. The saving rate fell to 1 per cent, its lowest level since 2007. While this may be a sign of confidence about better job prospects and higher wages, with household debt at record high levels, declining savings may concern the RBA. However, it is possible that spending will slow in the future, due to falling house prices weighing on household consumption. Government spending on infrastructure was also a major contributor to growth over the past year.

Over the longer term, GDP growth has been boosted by strong population growth, with GDP per capita growth declining by more than GDP growth since the 1990s.

The RBA is keeping a close eye on the many moving parts of the economy and the risks on the horizon. With little change to the RBA’s interest rate statement, the RBA won’t be lifting interest rates until at least the second half of 2019.

SMH / OCT 2, 2018