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It is no secret that China is fast becoming the world’s greatest economical power. Largely unscathed from the Global Financial Crisis, the most populous nation on Earth has invested heavily abroad in recent years and Australia has been one of the primary recipients. Western Australia and, more specifically, the real estate industry is no exception and the trend is continuing to influence the prices of houses for sale in Perth.
A new generation of wealthy Chinese citizens has formed and they are increasingly looking to move overseas. Many are attracted to Australia by the lifestyle, work prospects and education opportunities available here. This trend is apparent in data. Investment bank, Credit Suisse, reported that Chinese investors had spent some $24 billion on Australian real estate in the last seven years and this figure is expected to nearly double in the following seven.
While the resource sector, one in which China is heavily invested, is undeniably declining in Western Australia, the consistently strong Chinese Yuan (currency unit) and relatively loose foreign investment regulations will likely continue to encourage Chinese real estate investment in the state and provide a boost to the price of houses for sale in Perth.
Although the Foreign Investment Review Board (FIRB) has restricted the purchase of established homes for sale in Perth, Chinese based developers are able to buy and sell property to immigrants and locals alike. This restriction has also fuelled investment in land and new developments.
Further enticement to Perth stems from the soaring house prices on the Eastern seaboard, particularly in Sydney and Melbourne, over recent years. This has resulted in greater interest in the Western Australian market and benefits those with homes for sale in Perth.
What does all this mean to the Perth property market?
Some commentators express concern that heavy foreign investment is unduly inflating the housing market in Australia and leading to property becoming unaffordable to many sections of society, such as first homebuyers. Those who subscribe to this school of thought feel there should be an overhaul of the rules for foreign investors, making it more difficult for them to do so in Australia.
Others suggest it will actually help regulate the real estate market in Western Australia, as the year ahead looks to be more favourable for buyers in general. They believe the foreign investment, particularly from China, will likely even the playing field somewhat and this can only be good news for anyone looking to place their house for sale in Perth.
Whichever way you view the influx of Chinese investment, it undoubtedly has a strong influence on the real estate market and is a contentious issue.