Throughout 2014, Chinese investors purchased real estate in Australia, with a total worth of US$1.5 billion. Recent reports say that in the first three months of 2015, these foreign business investors already spent almost the same amount on properties in the country, their purchases amounting to US$1 billion.
It seems that the current trend in Chinese entrepreneurs is to invest in commercial property in the Land Down Under. This trend spells growth for the local economy as well, because this tie with the Asian country opens numerous business opportunities that increase capital flow from China to Australia.
Likewise, the better bi-lateral trade relationship and increasing number of Chinese settlers, students and tourists complement this influx of profit. Australia is currently competing with other global markets for capital. Thanks to the property investments from China, the country appears to be enjoying a lasting support for the capital flow.
China’s Impact on Australian Market
In the first quarter of 2015, China ranked second on the list of foreign direct purchases of commercial property, ahead of the U.S. and behind Singapore. According to records, Chinese investors prefer properties in development sites within 5 kilometres of Sydney, Melbourne and Brisbane CBDs.
As per the analysis of American commercial real estate company CBRE, Chinese investors acquired 36 of the 116 sites sold. They bought 16 in Sydney, 15 in Melbourne and five in Brisbane.
What’s Ahead for Both Countries
This economic activity by China benefits Australia in significant ways. But with current stock market slumps affecting foreign investments, the local economy may be in jeopardy. Reports say that China is experiencing financial crisis with the stock market nosediving.
Although China’s economy continues to grow, it’s doing so at a much slower rate. Officials of Australia and the business industry closely watch the trend, preparing in case this escalates to a much bigger problem similar to the Wall Street financial disaster in 1929.
Australia is strongly tied to China economy-wise. Any significant changes on the part of the Chinese will affect the local market. As of now, Australians can only hope that things don’t take a turn for the worse.