Its a mistake to follow the Chinese

[see_change]

https://hotspotting.com.au/articles/s-mistake-follow-chinese-investor-patterns/

Here's terry Ryder's take on the xenophobic hype about Chinese buyers in the market at the moment . I wonder if he should have added parramatta to the list .....
Cliff

 

[nhg]

I wish I had this article last month.

I was speaking to an aquaintance who was adamant the reason he couldn't affor his dream oldish $2M house was because of the Chinese. I tried to point out they couldn't buy non-otp and he was a normal guy in a normal job paying $1k/week in rent.

Him: "Those Chinese investors keep outbidding me at auctions"
Me: "umm you mean those Australian citizens?, werent you born overseas btw?"

Lol

 

[scientist]

I wish I had this article last month.

I was speaking to an aquaintance who was adamant the reason he couldn't affor his dream oldish $2M house was because of the Chinese. I tried to point out they couldn't buy non-otp and he was a normal guy in a normal job paying $1k/week in rent.

Him: "Those Chinese investors keep outbidding me at auctions"
Me: "umm you mean those Australian citizens?, werent you born overseas btw?"

Lol

It's true that chinese can't buy non-otp but I wonder how many Australian citizens are using money from chinese relatives to buy for them. Your friend isn't completely wrong.

 

[Terry_w]

great article.

 

[Deltaberry]

With a few exceptions, generally Chinese driven markets have underperformed.

The key is, if the market was already experiencing strong local demand, and then Chinese came in on top, that's a gold mine. If you rely purely on Chinese investors, maybe not.

 

[nhg]

With a few exceptions, generally Chinese driven markets have underperformed.

Pretty much.

 

[grand dad]

Without a doubt, many Chinese are being misled into buying over-priced junk that nobody else wants, often in inner city areas. When the party is over, there is going to be a huge hangover.

 

[TMNT]

Pretty much.

Ok, so I get what you are saying that the Chinese jump on the bandwagon and overpay but most won't know or care of how their investments perform

That being said, sure buying in nov 2013 might be a poor decision but I doubt that any investor who has purchased in the last two years would have an underperforming investment

Just my 2c

 

[bumskins]

I wish I had this article last month.

I was speaking to an aquaintance who was adamant the reason he couldn't affor his dream oldish $2M house was because of the Chinese. I tried to point out they couldn't buy non-otp and he was a normal guy in a normal job paying $1k/week in rent.
Lol

I thought they could buy existing, if they have "plans" to redevelop. In any event I doubt any of it is monitored anyway.

They had an interesting article the other day on how many "vacant" properties there are in the Melbourne CBD. They based there judgement on the water & power usage statistics over the past 12 months.

Personally I am happy for them to bank roll new stock.

 

[roe]

It's true that chinese can't buy non-otp but I wonder how many Australian citizens are using money from chinese relatives to buy for them. Your friend isn't completely wrong.

Chinese has their kids here which are Australian citizen,
most sent here to study, got a job then become PR/Citizen

the kids buy them in their name, parent supplies the cash but then again it could just Asian-Australian

 

[Aaron Sice]

Without a doubt, many Chinese are being misled into buying over-priced junk that nobody else wants, often in inner city areas. When the party is over, there is going to be a huge hangover.

When your investment plan is 150 years, not 15, you'd think a bit differently too...

 

[roe]

Ok, so I get what you are saying that the Chinese jump on the bandwagon and overpay but most won't know or care of how their investments perform

That being said, sure buying in nov 2013 might be a poor decision but I doubt that any investor who has purchased in the last two years would have an underperforming investment

Just my 2c

At some point people will the Japanese is doing the same thing in the 80s

you only know a bubble when they popped, not before, not in it, not while people chase it and float it

the only sensible thing to do is buy based on your research and pay cheap for it..how long and where the bubble goes dont care

 

[marg4000]

I was speaking to an aquaintance who was adamant the reason he couldn't affor his dream oldish $2M house was because of the Chinese. I tried to point out they couldn't buy non-otp and he was a normal guy in a normal job paying $1k/week in rent.

Yes they can and they are doing so. They simply demolish the existing house and build a new one.
Marg

 

[BayView]

I was speaking to an aquaintance who was adamant the reason he couldn't affor his dream oldish $2M house was because of the Chinese. I tried to point out they couldn't buy non-otp and he was a normal guy in a normal job paying $1k/week in rent.

Bring that man a cup of concrete and the reality check, please waiter!

 

[flygo]

As an investor, I welcome Chinese pouring money into OZ market to push prices up. The more, the better.

 

[rodimus]

As an investor, I welcome Chinese pouring money into OZ market to push prices up. The more, the better.

Agreed. As investor, you should be on your knees and be thankful for your increased property value - if the claims that the Chinese factor is the only one that is pushing up property prices is even true.

In reality, Australia property prices have been shooting up ever since the anticipation of the Sydney Olympics and GST of year 2000. Not to mention the First Home Owners Grant (FHOG).

But the real push for Australian property value is the rate of migration into Australia every year. Australian population has been increasing every year for the past 100 years. There is always demand for more. Supply and demand ratio may change and flip flop, but over the long term there is always demand because of migration.

The ones complaining are those who have been waiting on the sidelines, being too cautious to enter the market. They missed the bus and now they have to find a scapegoat to blame.

 

[the_captain]

You've got to understand the Chinese mindset. In China, direct investment by your regular middle class punter is a very very new thing.

China has only very recently gone through it's first and only property correction. Values have fallen in Beijing and Shanghai by as much as 30%.

The harsh reality is that in China, there is nowhere else to really invest your money. The sharemarket is rigged, and a lot of people do not trust it, as they cannot physically hold / touch a share. Chinese people also generally do not like credit cards, most transactions are done in cash.

Property is seen as a safe investment vehicle, or at least it was.

This is why it is easy for unscrupulous investment companies to crank the handle on the old two tiered marketing scam. It's very easy to paint Australia in a good light in terms of investment due to our transparent system and true market economy.

Australia also has other aspects that the Chinese buyer loves. Space, few crowds, relatively no pollution, minimal traffic and cleanliness.

Chinese also like Australia because we have good secondary and tertiary educational institutions. Their mindset around education is very different to ours. The Chinese family will sacrifice everything to give their child a good education, so they will purchase properties in good school zones, to give their kids every possible chance at success.

Filial piety plays a huge role in Chinese culture and the parents see this investment in their kids coming back to them in the form of a very comfortable retirement.

Lastly the culture of face also would play a big part here. If you can own an investment in Australia you would be pretty big time amongst your circle of friends and co-workers. People in china share much more intimate details of their financial state, than we would in western society, such as what they earn per month, how many investments they have, how much money they made last year etc...etc... The ones that do well, or even appear to do well are admired and emulated.

All of these are factors that could be easily exploited by these sorts of companies to sell dodgy units on the gold coast, or in southbank to naive OS investors.

 

[Deltaberry]

China - especially Shanghai - is already undergoing a recovery and moving faster than Sydney in many parts.