Chinese buyers losing interest in Sydney property ... with one exception


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As China's Golden Week gets into full swing, a buyer from China visiting as part of the national holiday enters negotiations to buy an $8 million house in Mosman.

It's the important week in every real estate agent's calendar when the red carpet is rolled out for Chinese visitors touring Sydney for its real estate. But as China's Golden Week national holiday celebrations come to an end, there are signs that foreign buyers have started to turn off the city's property market.

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Even before the state government introduced an extra 4 per cent stamp duty surcharge for foreign buyers in July, figures show fewer Chinese buyers searching for Sydney real estate opportunities this year, according to data fromChinese property website Juwai.com.

Not only has the number of prospective foreign buyers fallen, but so too has their budget for homes down under, according to Jane Lu, Head of Australia for Juwai.com.

Juwai figures show that of the thousands of searches for property in Sydney from buyers in China, the number of inquiries dropped 9.7 per cent in the first half of this year from the same period last year.

In that time the price of those searches fell 8.4 per cent from an average $697,196 last year to $638,187 for 2017.

???Australia's median property search price remains comparatively high to the US and Canadian markets, of $414,000 and $459,000 respectively.

"That's partly because of the level of affluence of the Chinese buyers who come here," said Ms Lu. "It has more to do with the relatively high property prices, especially in Sydney."

Sydney's median house price is at $1,178,417, according to Domain Group data.

Prestige agent Monika Tu, of Black Diamondz Concierge and property business, says foreign buyers in the prestige end of the market had adjusted their budget to account for the extra stamp duty surcharge as well.

"Buyers who were looking at housing in the $10 million range have lowered their budget to $8 million," Ms Tu said.

On July 1 the state government doubled the stamp duty surcharge for all foreign buyer property purchases as part of a broader package to address housing affordability, including abolishing stamp duty for first home buyers up to $650,000 and offering stamp duty relief for homes of up to $800,000.

Ms Tu saw the number of inquiries drop off this Golden Week holiday compared with last year, but said the cool-off in sentiment among China's shoppers was not likely to affect the high-end prestige markets like Mosman.

"These buyers occupy their own universe - very different to the typical Chinese buyer, who has a much more middle-class profile," said Ms Lu. Buyers this year were also better qualified to buy now with their funds and visa approvals in place.

One such buyer visiting from China entered negotiations to buy an architect Gilberto Menandez-designed mansion in Beauty Point at Mosman last week for about $8 million. The exchange is pending Foreign Investment Review Board approval.

Beauty Point vs Balmoral

The Beauty Point sale comes as Mosman's Balmoral slopes area saw a dramatic up-tick in foreign buyer purchases this year, marking a dramatic turnaround in recent years in which Beauty Point had seen the most off-shore buyer interest.

Beauty Point had garnered the lion's share of Chinese buyer attention in the years after high-profile Chinese property developer Huang Xiangmo bought his Bay Street mansion for $12.8 million in 2012.

However, of the 45 registered prestige sales in Mosman this year all but 30 were in the Balmoral slopes neighbourhood and almost half to recently arrived Chinese immigrants or foreign buyers.

That's a distinct turnaround on recent years, said Robert Klaric, of the buyer's advisory and advocacy service The Property Expert.

"The Chinese centre of gravity on the Lower North Shore has shifted from Beauty Point to Balmoral and the pocket around Chinaman's Beach," said Klaric.

Of the 15 prestige house sales elsewhere in Mosman, only one was to a foreign buyer.

"That's partly because there isn't much stock on offer in Beauty Point compared with Balmoral this year, but also because new arrivals prefer the feng shui of Beauty Point but Chinese buyers who have been here for a few years are just discovering Balmoral," said Ms Tu.

Nine months into 2017 and Juwai's Ms Lu doesn't see this year topping last year in terms of Chinese investment in Australian real estate.

"The year 2016 was the biggest yet recorded for Chinese investment in Australian real estate. We believe that 2017 is competing with 2015 for the rank of second or third biggest year."

The story Chinese buyers losing interest in Sydney property ... with one exception first appeared on The Sydney Morning Herald.

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