Real estate: Chinese homebuyers ‘are getting picked on’

Wealthy Chinese homebuyers will flock to Australia next year despite the current trade issues with China, but the future beyond 2022 looks less optimistic, according to a prominent Sydney real estate entrepreneur.

Monika Tu, whose firm Black Diamondz helps rich incomers transition into the Australian market, said key drivers were lifestyle, education and business prospects.

And despite the Covid pandemic, she said her business – which has an annual turnover of $200m – “keeps growing”.

“Australia is an attractive place to live because of the stable political environment, strong economy and good education,” Ms Tu says.

“The people I’ve been working with, they’re all from 35 to about 65 years old and they’re all successful business people.

“They come to Australia, not just here to retire, they come here to look for an international opportunity to invest or to work, and to grow or expand their business. Lifestyle is number one and then education.”

She also notes the attractiveness of a friendly community, proximity to China by comparison to Europe or America, and clean air.

“The pollution doesn’t discriminate in China, it’s still very polluted,” she adds.

Speaking to Sky News’ Peter Stefanovic for two-part special investigation China Rising – which examines all issues of China’s relationship with Australia, from geopolitics to business – Ms Tu also addresses a “misunderstanding” around the influx of wealthy Chinese property purchasers.

She rejects that overseas investors are taking opportunities away from Australians, suggesting “maybe it’s a misunderstanding because Chinese love the properties, so all the media is talking about, oh my God, they buy up Australia.”

And she says she does feel Chinese investors can get picked on, but acknowledges ”I’m a Chinese, maybe I’m a little bit more sensitive about how they talk about China.”

Ms Tu, who arrived in Australia in 1988 as a student speaking very little English and with no money to her name, says she deals with clients from all over the world and Australia – not just the Chinese.

Within Sydney especially, lavish spending has become commonplace among billionaires from mainland China, Hong Kong and Singapore. Homegrown tycoons from Asian families have also been transforming the city into their playground, spending big since 2018.

Popular areas for foreign investors include Hunters Hill, Point Piper, Bellevue Hill and Vaucluse, with a noticeable new trend among Chinese buyers, who initially went for the Upper North Shore due to the schools when they arrived some years ago, to now move to the Eastern suburbs.

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Australia’s overall foreign investment policy usually encourages overseas buyers to purchase residential property and, as a result, increase the supply of new housing. Without foreign investment, many new building projects would become unviable.

According to the 2019-20 FIRB annual report, China ranks third among the top five countries investing in Australian real estate.

Chinese investment in Australian real estate significantly dropped from the peak of $32bn in 2015-16 to $7.1bn in 2019 due to the Covid pandemic and simmering political tensions.

When asked how her firm was impacted by Covid, Ms Tu says in the short term her team have managed the situation well.

“In the long term I think we’ll be affected, at the moment I think it’s business as usual. Since the pandemic, my business keeps growing,” she said.

“The trade war hasn’t affected the real estate business in general, but in the long run I’m not sure because I think you will see maybe a declining interest in investing in business in Australia.”

Sky News’ two-part special investigation CHINA RISING airs on Tuesday, Nov 16 and Weds, Nov 17 at 8pm AEST.

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