In 2018, China was the most active buyer of Australian development sites.
Chinese developers have purchased 31% of all construction sites in Australia.
Chinese developers bought 31% of Australian construction sites in 2018, according to Knight Frank’s latest survey, Chinese Developers in Australia — Market Insight 2019. Chinese developers bought $1.3 billion worth of Australian residential development sites in 2018. This was down from $2.02 billion in 2017, which represented one-third of all site revenue. for sale in lusail
In 2018, 41% of all Australian sites purchased by Chinese developers and investors were suitable for low density (single dwellings or landed properties), up from 29% in 2017 and 2% in 2013.
According to Knight Frank’s Head of Residential Research for Australia, Michelle Ciesielski, Chinese developers have greatly increased their presence in the last five years, constructing landmark residential towers all over the world, including along the Australian east coast skyline.
“Last year, Chinese developers and investors spent $1.3 billion on residential construction sites in Australia. This was down from $2.02 billion a year ago, but the share of overall revenue dropped only marginally from 33% to 32%, representing a broader, slower-paced economy “”business,” she says.
Ms. Ciesielski mentioned that Chinese developers have faced numerous challenges over the years.
“All of this has had an effect on Chinese outbound investment, from the Chinese government attempting to moderate capital outflow to the impact when major domestic banks restricted lending to offshore borrowers, limiting the ability to rely on deep databases with clients familiar with projects in their home towns.
“Additionally, amendments to the Foreign Investment Review Board (FIRB) regulations and the Australian Prudential Regulation Authority (APRA) promoting tighter lending practices for investors cooling off-the-plan presales, as well as the implementation of state-based surcharges, are all current obstacles that local developers are facing.”
The majority of Chinese developers who have entered the Australian landscape, according to Knight Frank’s Partner, Head of Asian Markets, Australia Dominic Ong, are settling in for the long haul, diversifying their portfolios to respond to local market patterns.
“Zone Q, China Poly Group, Yuhu Group, and Aqualand have all increased their exposure to office assets in the last year, and this trend is expected to continue in 2019.
“In addition, Chinese developers are shifting their focus to lower-density residential, with 41% of sites purchased in 2018 suiting low-density, up from 29% in 2017,” Mr. Ong said.
According to the survey, Chinese developers constructed nearly 11% of all new apartments in 2018, out of 5,160 total, with this percentage expected to rise to 22% in 2021 for major Australian cities.
These new flats, according to Ms. Ciesielski, were concentrated in the major east coast cities of Brisbane, Sydney, and Melbourne.
“This covers projects that have already begun and those that have received construction approval and are currently being promoted. With current headwinds heading into 2019, the probability of all projects proposed by Chinese developers moving forward in the next few years is dwindling, with the exception of those with exceptional products.
“For Chinese developers, projects submitted for development approval and those that have already received approval but have not yet begun marketing campaigns appear to taper off significantly, with less than 6% of total projects in the pipeline.
“Following a long period of significant development, developers — both Chinese and local — must maintain reasonable expectations in the future. It would be critical to set aside enough time to improve their role in the market when the time comes to move forward “Ms. Ciesielski came to a conclusion.
