Impact of Chinese Property Buyer Restrictions on Australian Real Estate Market

Hello Ajay,

Yes, you are correct. Many State governments have introduced additional stamp duty for foreign buyers (note that there is no discrimination against Asians as such). Some State governments have also introduced an additional land tax component.

http://www.sro.vic.gov.au/foreignpurchaser
http://www.revenue.nsw.gov.au/taxes/spd
https://www.business.qld.gov.au/industries/service-industries-professionals/professional-financial-services/transfer-duty/investors/afad

The Federal government is also in on the act by phasing out access to the CGT discount while also increasing withholding on sales by foreign property owners and somehow charging foreign owners who leave their properties vacant.

http://www.budget.gov.au/2017-18/content/glossies/factsheets/html/HA_16.htm

We’ll have to wait and see how effective these new measures will be.

On one hand the additional taxes may strangle the foreign golden goose buying up (mainly) off-the-plan properties – which in turn supports construction, jobs and GDP. On the other hand, if their aim is capital preservation (as is the case for some Chinese investors who just want their money out of China), then a little extra cost is unlikely to worry them if the bulk of their capital is safe.

Keep an eye on the movement in property prices. As we come into Spring, and with a spike in off the plan properties due to hit the market soon, if the additional demand for housing does not match the increased supply then prices should fall.

All the best,

– Steve

“On the other hand, if their aim is capital preservation (as is the case for some Chinese investors who just want their money out of China), then a little extra cost is unlikely to worry them if the bulk of their capital is safe.”

Hi Steve, you are spot on this. lots of Asian buyers are actually coming for the good value of Australian properties (relative to home). if we compare the same apartments ( locations, size, facility,..), here it is so much cheaper than Beijing, Shanghai, Guangzhou,and Shengzhen ( first tier mega cities in China).

Unless AU government stops these buyers, the increased fees and charges is less likely to stop them, which is a really good thing for AU local economy.

• This reply was modified 6 years, 8 months ago by  Eric Wu.