Asian Investors Boosting the Northern Beaches Property Market.

asian investors flock to northern beaches property market

For many decades, Asian investors have been dominating the property investment markets. In the early 1980s and 1990s they were led by Taiwanese and Hong Kong investors. The 1990s it was the Singaporean and Malaysian Investors that took the lead. However over the past 10 years, mainland Chinese investors, property buyers and developers have dominated. China is said to be the largest source of offshore buyers of residential property in Australia for at least the past five or so years. New South Wales has welcomed Chinese property buyers with open arms. Sydney is particularly favoured and regarded by Chinese investors as a safe choice that is well supported by a strong rental market and solid capital growth. Whilst the Northern Beaches is still not at the top of the list for Asian buyers, in comparison to suburbs such as Hurstville, Chatswood, Killara, Macquarie Park or the CBD, we have still noticed the growing significance that Asian buyers, investors and property developers are having on the area. So what does this mean for local Northern Beaches residents? Here’s a the rundown on what we have found to influence Asian buyers and how it is impacting the Northern Beaches property market now and for many years to come:

  • Asian buyers are attracted to areas which are close to good schools and universities, or areas that have good public transport to be able to access good schools and/or universities. It is estimated that 85% of high net worth Chinese send their children abroad for education. There is a strong correlation between where their children are educated and where they buy holiday homes and emigrate to. The Northern Beaches has a high standard of education, plus many schools that regularly feature in the elite NSW rankings top 20 list year after year are within easy reach of the Northern Beaches. Such schools include Manly Selective, Sydney Grammar, Queenwood Girls, Wenona School, North Sydney Girls, North Sydney Boys, John Colet Belrose and St Aloysius’ College, amongst others. Such proximity to world class schools is certain to be preferable to Asian buyers.
  • Asian buyers are drawn to coastal locations. Large regional coastal cities like Newcastle, Wollongong and Coffs Harbour are popular, but research shows that Sydney leads the way. So it is only a matter of time that more and more cashed up Asian buyers will begin to purchase on the Northern Beaches.
  • The Northern Beaches can expect Chinese property investment to grow larger and larger, with tourism and incentive schemes increasing. The Australian Bureau of Statistics figures show that China arrivals increased by 26.5% in September. New South Wales alone welcomes more than 400,000 Chinese visitors each year, according to recent research. China Southern Airlines, Asia’s largest airline and the world’s fifth largest airline, bought a seven-storey building in Sydney’s CBD to use as its Australian headquarters. Chinese investment is fuelled with the launch of the Significant Investor Visa, plus given the tightening up of foreign property purchases around Asia, Chinese property investors are bound to look further afield.
  • Many Chinese buyers pay special attention to etiquette and ceremony, which is why our company ensures we are trained to be understanding of such courtesy’s. For example: When handing out a business card, use both hands and hand it over with your name facing the receiver, do not throw it across the table. When receiving a business card, do not place it in your back pocket, it is quite insulting. Ensure it is carefully placed in your coat pocket. This will show your Chinese purchaser that you respect them. If your real estate agent does not know simple courtesy’s it can be very damaging to your sale!
  • Chinese families take a consensus approach. If your property has interest from a Chinese buyer, you must permit viewing for all their family, including their in-laws, friends and other relatives so they can internally discuss the suitability of your property between themselves. This may require multiple inspections and will require a much stronger and experienced real estate agent to be able to assist with negotiations and ongoing inspections.
  • Chinese buyers can be wary and it will take a lot more skill from the real estate agent to gain their trust. Chinese buyers must be shown great respect throughout the negotiations. We have found that many of our Asian clients continually stay loyal to us as we have taken the time to gain respect and trust over quite some time.
  • Many Asian’s will avoid saying “no” to a property however are good at “saying they are thinking about it” …when really that have no genuine interest at all in the property. It is their way of being polite and is a way of avoiding losing face. With key questions from a trained agent this is easy to filter out in order to find the genuine interest.
  • Asian’s suspicious nature means they love to purchase a “successful” home or alternatively, a new home that has no previous negative history. New homes are often of preference for this reason but for “pre-owned” homes it is best to buy from someone that is upsizing or has won the lottery. This will mean you are buying into a home with successful energy. So homes that advertise a foreclosure or disclose a divorce or other affliction are not likely to be purchased by an Asian purchaser.
  • Homes that are on high, level, or slightly elevated ground are at an advantage to Asian buyers. Homes on the low side of the road are believed to not be protected, whereas homes on the high side are protected by a mountain or hill behind them. Furthermore, homes with land that declines at the rear of the house signify a loss and means that success and promotion is much more difficult. Asians prefer to buy homes that are wider at the front than the back. Square or rectangular blocks are favoured.
  • Asian’s will be sure to look at the entry point to the home. For example, is the home in a T-junction or a cul-de-sac? A road that ends in a straight line like a t-junction does, is not good! Many Asian’s believe that headlights from cars shining into a home is similar to tigers charging at the home.
  • Another point to note is that many Asian’s do not like the front door to align straight to the back door. The reason you want to avoid this situation is because all good energy coming through the main door will easily escape through the back door without having a chance to circulate and nourish your home. Asian’s feel they will lose luck with money, their career and life success so should be avoided.
  • Last but not least, the number 4 is a major issues for most Asian purchasers. The number 4 is very bad luck and means death. Instead they will favour the number 8 which means prosperity or number 3 which means longevity. Such belief in the meaning of numbers has actually seen Asian developers omitting negative numbers from their property developments altogether!

So if you are selling a home, you will be reassured to know there are many remedy’s to overcome some of these Asian beliefs. Having been trained and working side-by-side numerous Asian colleagues, we are pleased to say we have a good understanding of different cultures, a website that can facilitate overseas markets, and network that has the right systems in place to optimise your sales price. It can be very costly in a society that is constantly becoming more and more multi-cultural every day to not be trained in such beliefs and trends. For specific advice for your property please contact us direct. We look forward to speaking to you soon.

About Tim Cullen

Since joining McGrath Estate Agents 15 years ago, Tim Cullen has defined himself as a first class industry leader with an outstanding track record and rapidly growing and loyal client base. He ranked 1st on the Northern Beaches in this year’s Real Estate Business’ Top 100 Agents List and ranked 21st nationwide.