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Asian wealthy target smaller Australian cities
Brief:High Net Worth Asian property investors still favour investing in Australian property, but they are now looking to smaller property markets, according to a new report from the HSBC bank.
High Net Worth Asian property investors still favour investing in Australian property, but they are now looking to smaller property markets, according to a new report from the HSBC bank
Australia is among the top targets for wealth Asian property investors, a new report reveals – and there is plenty of appetite for further investment.
More than one-third (37%) of 7,245 High Net Worth Individuals already owned an overseas property in the country for investment purposes, according to a survey by the HSBC bank.
Looking ahead, affluent Asians are most likely to favour smaller property markets such as Queensland and ACT over the larger markets of New South Wales and Victoria, according to HSBC research.
Alice Del Vecchio, Head of Mortgages for HSBC in Australia, says, “HSBC’s research found that more than a third (37%) of affluent Asians currently own an investment property overseas with many of them looking to invest further in the next 12 months.
“Looking ahead, interest in Australia is expected to remain strong so our economy is set to be a key beneficiary as foreign investment activity can help increase the supply of new housing by stimulating constructions.”
Australia is currently the number one destination for offshore property investment among wealthy Indonesians, while Malaysians and Singaporeans ranked it second.
For the rest of Asia, 18% of investors, 10% from Hong Kong and 9% of affluent Chinese currently own Australian property.
Australia’s appeal amongst Asian investors is due to the fact of its quality of life, educational opportunities and its relative closeness to Asian home nations.
“It’s no surprise that Australia is highly regarded among affluent investors from Asia. Recent HSBC expat research shows Australia is consistently nominated as one of the top countries to live in amongst expats. HSBC’s research found that 71% of expats believe Australia provides a higher quality of life than the US and UK.”
“Australia’s appeal also extends to its community links with Asian countries. Close to 70% of Australia’s international students are from Asia, many of which stay in Australia long term to work or reside. We know from our own customer base that a large proportion of international mortgages in the past year have been located near universities.”
Investors across the region are considering new markets rather than the traditional targets of Sydney and Melbourne. Of the affluent Asians looking to buy in Australia in the next year, 25% intend to buy in Queensland, 23% in ACT, compared to 20% in Victoria, 18% in New South Wales followed by 16% in Western Australia.
“Sydney and Melbourne have the highest house prices nationally and have seen prices rise by 13% and 12% respectively over the past year. Cities like Brisbane may provide investors with a better entry point into the Australian property market given house prices there have lifted by only 3.8% over the same time period.”
“Access to universities, holiday homes in Queensland and the large public service sector in Canberra may also be a draw card for affluent Asian investors,” says Alice Del Vecchio.
The survey conducted by RFi on behalf of HSBC surveyed 7,245 affluent individuals across seven Asian markets (Indonesia, Malaysia, China, Hong Kong, India, Singapore and Taiwan) to understand their international property investment appetite and intentions. Of these individuals, 2,700 owned investment property overseas. The survey was conducted online in September 2013.

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