Property investors in China and other nations could help rebuild Australia’s economy.
Victoria’s peak home building body is calling on the government to encourage cashed-up foreign investors to swoop on Melbourne in the aftermath of COVID-19.
It comes as experts have flagged interest from China in Melbourne property, but denied there will be a “red tide of cash overwhelming Australian assets”.
Master Builders Association of Victoria chief executive Rebecca Casson has urged the government to suspend the 8 per cent in additional stamp duty taxes paid by foreign investors for “at least six months as an immediate way to offer stimulus”.
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“Every inquiry made by an overseas investor is an opportunity to generate activity for builders and the many other businesses our industry supports,” Ms Casson said.
“At a time when attracting investment into our state economy is vital, this is an opportunity that should be considered.”
International investment funded large amounts of construction work in Melbourne over the past decade, but has been curtailed by a range of measures.
Realestate.com.au chief economist Nerida Conisbee said with Australia and particularly Victoria well positioned to rebound strongly from the virus and measures needed to fight it, cashed-up foreign buyers were likely to search for bargains here.
“There’s tonnes of money out there, and this isn’t a financial crisis — it’s a productivity crisis,” Ms Conisbee said.
“There’s a lot of international capital looking at Melbourne and Australia, if we get through this virus relatively unscathed we will be in a better position than cities overseas to rebound.”
Ms Conisbee said offshore buyers would be hunting for development sites and industrial properties, with big institutional investment groups with assets worth billions of dollars around the globe expected to head the demand.
Singapore-based World Class Global developed the nearly completed tallest building in Melbourne, Australia 108. Its $25 million penthouse sold to a Chinese businessman.
Key signs to watch for ahead of an influx of foreign buyers would be foreign students returning to Australian universities and schools, as well as improving rental market conditions.
The nation’s biggest real estate portal, realestate.com.au, has also revealed Melbourne accounted for every one of Australia’s top ten most searched suburbs by buyers in China up to the end of March.
Melbourne, Box Hill and Glen Waverley top the list, but wealthy hubs Kew, Camberwell and Hawthorn are also in demand.
1209 Burke Rd, Kew sold to a Macau-based buyer as part of a two-house deal
Chinese investment portal Juwai IQI’s executive chairman Georg Chmiel said there wouldn’t be a “red tide of cash overwhelming Australian assets”, but noted cashed-up Chinese corporate investors were already “bargain hunting” in Melbourne and Sydney.
“Quality assets in an economy like Australia are very appealing right now,” Mr Chmiel said.
“This is a classic case of diversifying their holdings so that not all of their assets are tied solely to China itself.”
CBRE national director of metropolitan investments Mark Wizel said China could be a white knight for the city’s commercial property industry.
“It would be very similar to how the Chinese helped save the industry here in 2009 after the GFC,” Mr Wizel said.
“We didn’t see carnage then because the Chinese stepped in and started buying.”
355 Spencer St, West Melbourne sold to an investment fund with Chinese wealth behind it a week ago.
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