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It’s been a long-held Australian dream to be able to buy property and have your own home, but thanks to an unrealistic rise in housing prices, for many, turning that dream into a reality seems somewhat beyond reach. In addition to interest rates and banking policies, much of the blame for this is falling on Chinese buyers and investors.
Interestingly, however, the reason that pushed up the price of the winning house on The Block was not Chinese property investors, but an Australian comedian who paid more than $450,000 more than the lowest priced property on the show. So is blaming Chinese buyers fair, or even correct?
New research by Deakin University’s Dr Mona Chung casts doubt on whether it is Chinese buyers here or overseas who are pushing up the house prices in Melbourne and Sydney. The research, which surveyed more than 350 Chinese buyers from China, Malaysia, Singapore and Australia found 78% had migrated or were planning to migrate to Australia. And properties priced between $500,000 – $800,000 made-up just over half of their purchases.
Dr Chung says there has been very little research into the impact of buyers with Chinese backgrounds on the Australian property market, and most of the negative commentary was based on media and real estate agent speculation.
‘And because society doesn’t get the true picture of what is going on, people then go with all the guesses, it creates quite a lot of social instability among the Chinese and obviously Australians.’
'There is a perception that the Chinese are a bit like an invasion ... The majority of the Chinese who purchase real estate are doing so because they are migrating here and they need a house to live in.'
Dr Mona Chung,
Dr Chung says the study provides Australian-first research into the Chinese property market, highlighting multiple factors influencing prices, and shatters three popular, but incorrect myths.
Firstly, there is a perception that the Chinese are a bit like an “invasion”, Dr Chung says. That they are just basically coming in and buying anything and everything, which is just not the case. The majority of the Chinese who purchase real estate are doing so because they are migrating here and they need a house to live in. ‘Chinese aren’t really buying Australia – simply and shortly.’
A second myth Dr Chung calls out as incorrect is that because Chinese are buying real estate, they have been the cause of increased prices. The research is saying that is not necessarily the case.
And thirdly, Dr Chung says the talk about the Chinese only buying in certain zones is not the case. The top criteria that came out of the research and why they are buying in a particular area is convenience; areas where there are shops, schools, transport. All of those facilities are readily available in areas that are more attractive.
Dr Chung says she didn’t draw a direct conclusion that coverage and debate about the Chinese and the property market was based on race but rather it is an undertone or influence. We had a very ‘in your face’ White Australia policy, Dr Chung argues, and although it was abolished, the racial division remain.
‘I certainly believe for historical reasons the Chinese were not welcomed with open arms. Yes, there is that undertone or phenomenon of saying “which group of migrants do we prefer?”.’
Dr Chung argues one of the key elements in the debate is that there is a new generation of Chinese migrants who have money. And, in part, this is because Australia’s migration policies are targeting Chinese and other nationalities with money to invest in Australia.
‘As a small country we need it. Without foreign investment we’re not going to develop.’
Multiple factors have influenced the price of housing in Australia, from government and financial policy such as negative gearing, to banks profits, infrastructure, and land releases. But Dr Chung argues the Chinese have suddenly become very prominent compared to other cultures as the push for investor migrants and China’s booming economy and huge population meet head-on.
She cites the Business Innovation and Investment visa program, which starts at $1.5 million worth of investment and goes up to $15 million. Out of all the applicants from that program alone in 2014 – 2015, 90% were Chinese.
‘There is a two-toned thing here. One is we really need you, and the other is there’s a bit of an envy there. We need you, we rely on you but we don’t like you just yet,’ Dr Chung says.
Interested in studying about the property market? Consider studying real estate and property at Deakin University.
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