Australia Property

[greengiraffe]

In the first place, if there is a less $ minded government, we dun need problem solvers.

Hence, how to believe in consters that create problems, be "good men" and solve problems...

confused

Ya he solves problems... that's good enough for me

3 types of people: those who create problems, those who do nothing (and often talk alot), and those solve problems

[CityFarmer]

If is flaw to say a less $ minded government will bring no problem, thus no need problem solvers.

NGOs are also need talent to solve their problems...

In the first place, if there is a less $ minded government, we dun need problem solvers.

Hence, how to believe in consters that create problems, be "good men" and solve problems...

confused

Ya he solves problems... that's good enough for me

3 types of people: those who create problems, those who do nothing (and often talk alot), and those solve problems

[greengiraffe]

Best to look after one-self...

If is flaw to say a less $ minded government will bring no problem, thus no need problem solvers.

NGOs are also need talent to solve their problems...

In the first place, if there is a less $ minded government, we dun need problem solvers.

Hence, how to believe in consters that create problems, be "good men" and solve problems...

confused

Ya he solves problems... that's good enough for me

3 types of people: those who create problems, those who do nothing (and often talk alot), and those solve problems

[Pain]

greengiraffe,

I like your postings on Australia Property and reading it, do keep it up.

CityFarmer,
Boss, I thought the postings are related Australia Property....but..??

Vested.

[CityFarmer]

greengiraffe,

I like your postings on Australia Property and reading it, do keep it up.

CityFarmer,
Boss, I thought the postings are related Australia Property....but..??

Vested.

First of all, welcome to VB.

My last post is a following-up post of GG comment, which I do agree has nothing to do with Australia Property.

Regards
Moderator (CF)

[greengiraffe]

APRA ready to act on housing
THE AUSTRALIAN OCTOBER 11, 2014 12:00AM

Michael Bennet

Reporter
Sydney
Wayne Byres; Secretary General or the Basel Committee on Banking Supervision, speaks at the G20 Australia conference in Sydne...
Wayne Byres: ‘People love the term macroprudential because it sounds like it’s really important and novel’. Picture: James Croucher Source: News Corp Australia
WAYNE Byres, the nation’s new chief banking regulator, has downplayed the hysteria surrounding so-called “macroprudential” tools to cool the investor-led housing boom, arguing they had always been used in times of “frothy” property cycles.

After two years of strong property price gains, regulators are mulling new rules to curb investor lending after the Reserve Bank warned the market was becoming “unbalanced” as risks build in the hot Sydney and Melbourne markets. Tools include forcing banks to ensure investors can repay loans under more extreme rises in interest rates or pushing up lenders’ capital requirements.

Another option installed by New Zealand last year is limiting lending at loan-to-value ratios above 80 per cent, but RBA assistant governor Malcolm Edey last week suggested LVR caps would not be used in Australia because of the hit to first-home buyers.

“I don’t want to rule anything in or out at this point, but I wouldn’t disagree with anything Malcolm has previously said on the subject,” said Mr Byres, who became chairman of the Australian Prudential Regulation Authority in July.

It is the first time Mr Byres has weighed into the debate around macroprudential tools, which APRA would be responsible for imposing, potentially by year end.

Mr Edey, speaking yesterday on the same panel at a Finsia conference in Sydney, said the long period of low interest rates was leading to an increasing “concentration of risk-taking” in the housing market.

Mr Edey and Mr Byres, however, said macroprudential rules were not new, despite recent hype.

Mr Byres added regulators were simply doing their job, citing when measures were taken to cool the market in 2003-04 after attempts to publicly talk about the risks and discuss concerns with banks failed to slow house prices.

“Because the concern continued and talking wasn’t enough, then we made some changes to capital requirements; we changed requirements around mortgage insurance; we did some other things designed to just temper the incentives.

“Much of it is just APRA doing its job, which is as things start to get a bit frothy … there’s a gradual turning up of the dial of supervisory and regulatory intensity. People love the term macroprudential because it sounds like it’s really important and novel, but there’s actually not a lot new.”

Morgan Stanley strategist Daniel Blake said regulators were trying to “jawbone” down the property market to buy time on installing new rules before the final report next month from the government’s financial system inquiry.

The inquiry could call for the major banks to increase capital levels, a prospect that has prompted a flood of warnings from senior bankers that lending could be stifled and consumers would wear unnecessary higher prices.

While conceding ongoing new regulation was a headwind for banks, Mr Byres argued it was outweighed by more sustainable competition and growth.

“Clearly there’s a lot of regulatory change and that does impose cost, but I think ... what the community wants is sustainable competition and sustainable growth, not something that accelerates through the roof and then drops through the floor and that was really the pre-crisis environment,” Mr Byres said.

The inquiry is the banks’ biggest near-term concern, with APRA to ultimately impose any new rules requiring them to increase capital levels.

[greengiraffe]

Beneficiaries of the property boom
PUBLISHED: 3 HOURS 52 MINUTES AGO | UPDATE: 1 HOUR 35 MINUTES AGO

Beneficiaries of the property boom
Jeremy Allsop, a Sydney real estate agent who just turned 30, drove a 1995 Chevrolet Corvette halfway across Australia last Sunday as his own way of celebrating strong sales.  Photo: Nic Walker

SAMANTHA HUTCHINSON AND REBECCA THISTLETON

Diners at the Chatswood Chinese ­res­taurant on ­a ­Saturday night in 2011 would have hardly given the table a ­second glance. Elated as the group sitting around the lazy susan were, David Milton and his team from CBRE’s project marketing division were tired. It had been a long day.

But after generating more than ­$300 million in just one day’s work, it was time to celebrate. The group had sold 292 apartments, 90 per cent of the project’s two buildings, in just eight hours.

“It was the first time in 15 years anything like that had happened,” Milton says.

“I remember thinking at the time it was like the bell had rung.”

Fast-forward three years and the ­property activity Milton reckons began that day is in full swing and gathering pace.

Former US Reserve Bank chair William McChesney Martin once described good monetary ­policy as knowing when to take the punch bowl of low rates away just as the spending party gets swinging. In Australia, the throngs of real estate agents and a raft of hangers-on are enjoying that ­delightful moment when the warmth of the booze has got feet dancing, yet the ­punchbowl isn’t going anywhere.

House prices are soaring, the value of loans to investors is at record highs, but Reserve Bank of Australia governor Glenn Stevens is keeping rates pegged low. The only potential party-pooper is the threat of macro-prudential rules to trim back bank lending to property investors.

Until that happens, realtors, developers, house photographers, feng shui consultants, furniture stylists and gardeners can barely believe their luck. They are at the right place at the right time, doing the right thing. And in real estate, location is everything.

PERSISTENCE PAYS
In a prime spot is Jeremy Allsop.

The Sydney real estate agent, who just turned 30, drove a 1995 Chevrolet Corvette half­way across Australia last Sunday. It was a gift to himself; the same model he lusted over as a child peeking into his uncle’s garage. Its first owner shipped it from the United States and never drove it in the rain. And when Allsop bought it, there were just 49,000 kilometres on the clock and condoms in the glovebox.

He added another 1400km bringing his dream car home. Personalised licence plates are on the way. “I drive it daily; anything I buy I use,” he tells AFR Weekend, alluding to the good wine, shoes and Mont Blanc pens he buys himself as rewards for strong sales.

“I like to do things that other people can’t. Anyone can buy a BMW. This is a little bit special.”

Hunting for the right car took months, but his persistence is why Allsop is confident he will still be in the game for the long run, and if the market was to turn. Allsop’s hunger for success was evident early in his career.

Recalling his first home sale, Allsop says a couple interested in buying the home offered to give him their own home to sell, if he accepted their bid on the other property. His response took them back.

“I said no, that they would pay the amount I told them, and then they would give me their listing,” he says. “I told them the truth: I work for my vendors, isn’t that what they’d want from an agent, the best price?”

Boldness and honesty meant the buyers agreed to pay the asking price. Allsop sold their home, and sold it again a few years later. And after more than a decade of ­sharp-eyed determination, he has stuck with LJ Hooker and is now a sales manager.

UPS AND DOWNS
Allsop illustrates his change in fortunes with a simple equation: for every five homes he lists today, there are at least 10 buyers.

When at the start of the century and aged in his late teens, he became an agent, it was 10 homes to five buyers. Homes languished on the market for six months.

Those were the dark days of discontent, when mortgage rates were at 7 per cent and the effects of the mining boom were only in their infancy.

CBRE’s David Milton remembers in 2005 when he sold just 84 properties in one year. The following year he sold 120. This year, his team is expecting to sell more than 3500.

The agent, known for his knock-about country manner, cuts a sharp figure at ­res­idential projects wearing an Hermes belt and elegant Italian leather shoes.

When asked what car he drives, he ­sheepishly admits it’s a Ferrari. Before that, it was a Porsche. “It hasn’t happened overnight, you know,” Milton says. “It’s been a gradual change. Buyers are making ­decisions more quickly, but it’s a high level of activity coming off a seriously low base.”

Milton jokes that times are good and he’s spending while he can, but ­memories of tougher times aren’t far away. “The­ introduction of the GST [goods and services tax] nearly killed me,” he says.

“Three clients went into receivership. It was very tight, extremely tight.

“And in 2004, the market was completely unsustainable. There was an oversupply, we lost a huge amount of money, but it’s made me stay focused, you reduce your expenses, you work on your marketing systems and your IT [information technology], and when the market comes back, you’re in a position to make things work.”

Milton has earned notoriety leading CBRE’s project marketing division, a ­130-man team charged with finding buyers for hundreds of off-the-plan apartments.

Under Milton’s watch, Chinese developer Greenland earned $275 million in one day, when he launched the first tranche of 250 apartments at Greenland Centre, its ­66-floor residential skyscraper which, upon completion, will be the tallest in Sydney’s CBD.

Greenland’s latest project, Leichhardt Green, within a former hosiery factory in Sydney’s inner west, will yield 240 apartments with prices starting at $480,000.

It launches later this month, and in a marker of the madness, interested buyers have been told to arrive before 7.30am to get a decent spot in the queue when sales open at 9am.

INDULGENCES
Sitting behind Milton, another cog in the property machine is Mark Wizel. He’s a Melbourne-based agent who sells blocks of land, upon which high-rise fortunes are built.

Like Allsop, Wizel’s foundation days ­coincided with the financial crisis, in which cutting a path demanded no small level of entrepreneurship.

“We had to find new ways. We’d be selling a building, so I’d find a restaurant tenant for the ground floor first – it’s about finding ­solutions,” he tells AFR Weekend.

Wizel was born to an enterprising couple who owned an Ugg boot stall at Melbourne’s Queen Victoria Markets. In the ’90s, clip-on koalas and plastic kangaroo road signs sold well to European tourists.

Higher-end products sold better to the few Chinese tourists.

Wizel’s father started stocking Akubra hats, Ugg boots, sheepskins and shark ­cartilage, and courting tourist guides who brought busloads of Chinese tourists to his stall. “We were selling out by midday.”

Working in the store, Wizel honed his sales skills from a young age.

It was an invaluable experience which would placed him on an enviable footing when a wave of Chinese investment filtered into Melbourne from 2010 onwards.

Now 31, Wizel is known as The Wiz and heads CBRE’s Melbourne City Sales team, which has successfully positioned itself as a link for landowners to Asian developers.

He was best man to Richard Gu, whose AXF Group is building apartments and hotels in Melbourne and Sydney.

His Chanel tie, Louis Vuitton case and sharp suit are more about personal ­branding than indulgences. Wizel is targeting a market big on labels and image, he says.

It’s a formula that works. His ­17-strong sales team, which targets new investors to Australia with an eye to gain their repeat business, has sold more than $1.6 billion of property around the Melbourne CBD and city fringe since mid-2011.

Wizel recently sold a $60 million site on behalf of Grocon to a new offshore group, represented by lawyer Jenny Wang of ­Berrigan Doube Lawyers.

She has always specialised in property but her client list has swelled, particularly in the past year. She says she is used to long hours but has been surprised at the hours her clients work.

Wizel knows it all too well, but says it’s not just the offshore developers demanding that deals get done at a faster pace.

ALL-HOURS NEGOTIATION
Last Valentines Day, he nailed a $21 million St Kilda Road site at 2am, having pulled the vendor and a local buyer into the Rialto Tower boardroom at 9pm. The five-hour negotiation began with Wizel grabbing roses and a juice bottle to honour the date, February 14, and break the ice between the two parties, one locked at buying for $20 million, the other selling at $21.5 million.

The prospective buyer was Caydon ­Properties director Joe Russo, whose wife and school-aged daughter followed him into the negotiating room. Stuck in a deadlock, it was his daughter who broke the impasse. “My dad’s not going to give you any more money,” the 13-year old chimed in from a ­corner of the boardroom table. “You might as well take it.”

They got the tower for $20.9 million.

Wizel’s ascent may not surprise pundits who have watched the number of off-the-plan apartments filling weekend property pages. Nor will it surprise the families who live in central locations fielding multiple knocks at the door each week from ­developers with their eyes on their site.

But other, more tangential sectors of the market also report they are feeling the same warm flow of the wealth effect trickling out from the housing market.

More than a decade ago, Lizette Akouri spent $2000 to have a Chinese grand master of feng shui tour her home. His advice on how she could improve her wealth, health and general fortune had such an explosive impact on her life, Akouri switched careers to become a feng shui ­consultant herself. It would prove to be a fortuitous move.

Nowadays, the Macau-born resident of Sydney’s North Ryde has built a steady client book of potential home buyers, existing home owners and retailers asking advice on how to manipulate energy flow and ­magnetic fields in their dwellings to harness positivity and avoid bad fortune.

HOMEWARE HOT
Akouri chairs the local chapter of the international Association of Feng Shui ­Consultants, and says demand for feng shui consultants is likely to be the highest it has ever been in Australia.

“Business is very good at the moment; the majority of us are doing very well,” she says.

“It’s because of the property boom. There’s so much movement in the ­sec­tor and people moving house, buying a house, thinking about buying a new house, which means a lot of us are doing more ­assessments, but of course we always want more.”

It’s the same story for Coco Republic. The upscale furniture group sells a raft of ­coastal-chic and Scandinavian-influenced furniture and homeware designs in ­show­rooms around the country.

It also rents luxury couches and neatly sized furniture to make properties on the market appear more stylish, in addition to an interior decorating service for residents and a growing number of developers.

The group has had to take on new staff at every level of its business, from administrators to management and stylists, to cope with demand in the past 12 months.

Chief executive Jeremy Byrne says he’s doubled the size of his Brisbane warehouse and has beefed up inventory levels of ­furniture for loan by 30 per cent in the past six months. Staff have been burning the ­midnight oil to keep up with demand.

“We’re the sort of company that will never turn down a job – if we ever had to say to ­client that we couldn’t help them, it would be a complete failure of what we’re trying to do,” Byrne says.

It a sentiment that echoes with David ­Milton’s rule of thumb for an industry known for wild highs and white-knuckled lows: fast times can pay off, but only if you’ve made the effort during the slow times to get prepared for when the sun shines.

And here is the rub. As the skin pulls thin across a sector ballooning with new buyers, there are smaller players for whom the property boom is becoming a little unbearable.

Agents complain to AFR Weekend that real estate photographers, gardeners and creative agencies who splice together shots of homes for glossy promotional videos are booked out for weeks at a time.

‘STRUCTURAL SHIFT’
One agent tells of a home in Coogee that launched to market a week late, after they couldn’t secure the photographer they wanted. “[The photographer] actually told us a couple of weeks ago that we needed to book in early to get her on the job, and we didn’t believe her. It was a really bad ­decision,” the agent said.

Feng shui consultant Akouri says some of her peers are complaining they are losing work to grand masters from China who are flown in by wealthy families for a ­private consultation. “Chinese buyers ­usually use the feng shui masters who only speak Chinese, and they fly them in from overseas,” she says, her voice carrying a note of frustration. “It ­happens very often.”

Lizette charges a minimum of $298 to visit and write a six-page report on a two- to three- ­bedroom home. Chinese grand masters, by comparison, are unlikely to charge any less than $4000 for a single consultation, which might only contain verbal advice, be­fore ­airfares and accommodation is added. “We would like more buyers to come to local ­consultants like us, because we are cheaper but we are also very good,” Akouri says.

All booms must come to an end. Real estate agents like Wizel, who recently ­commissioned a painting of the Ugg boot stall at Queen Victoria Markets to remind him of his past, disagrees with the sentiment that he needs to rake the money in quickly as the sun might set soon. The market is strong and investment levels are picking up, he ­reasons. Besides, what use is there ­spec­ulating about a dip?

“I don’t think about it. You can’t think like that. We’re seeing a structural shift – there will be 160,000 new Chinese millionaires every year until 2020.”

Meanwhile, Milton is adamant the market still has a fair way to go before demand for apartments near ­Sydney’s CBD softens. But he always has an eye on the future.

“You need that training and development and to have those good systems in place if you want to future-proof yourself,” he says.

The statement dovetails with Allsop’s easy-come, easy-go view. Allsop isn’t ­worr­ied about how long the boom can grow before it dives, he says, because “the cycle” is what separates successful agents from the fair-weathered.

The Australian Financial Review

[greengiraffe]

Residenital investors turn from buying to selling

PUBLISHED: 3 HOURS 53 MINUTES AGO | UPDATE: 1 HOUR 42 MINUTES AGO

Residenital investors turn from buying to selling
The drop in lending to investors over August is in contrast to the 6.8 per cent rise recorded for July.
SCOTT PARKER
Following a year of big property gains some investors may be cashing in.

A survey by Investment Trends found that more people plan to sell than buy an investment property in the ­coming month.

Since the index’s inception in ­September 2011, those who have said they intended to buy have consistently outnumbered those who say they planned to sell.

“For the first time there’s actually a negative intention,” Investment Trends senior analyst Recep Peker said.

The results were reinforced by Friday’s August home loan data published by the Australian Bureau of Statistics.

In seasonally adjusted terms, the value of residential loans, excluding alterations and additions, fell 1.2 per cent over the month to $28 billion. This included a 2 per cent drop in owner-occupied loans and a surprise 0.1 per cent drop in investment loans.

The drop in lending to investors over August is in contrast to the 6.8 per cent rise recorded for July.

Despite the unexpected dip, ­investors still account for about half of total housing loan approvals, excluding refinancing, ANZ economist David Cannington said.

“This is the highest share on record and it has risen from around 40 per cent when the RBA started cutting rates in November 2011,” he said.

Lonsec head of direct assets Kevin Prosser said he didn’t believe there had been a noticeable change in mood among property investors.

“I don’t think it’s tipped greatly,” he said. “The outlook is certainly for another six to 12 months of rates staying where they are; that to me is the critical factor, and/or the economy, if jobs start disappearing.”


MIXED PICTURE
Mr Prosser did concede that recent press coverage and cautionary comments from the Reserve Bank of Australia may have had an impact on sentiment. “It can set a mood,” he said.

Reserve Bank of Australia head of financial stability Luci Ellis noted that close to half of all new net housing finance is for investors.

“That share is noticeably higher than rental housing’s share of the housing stock, even allowing for a possible faster rate of churn in investor loans,” she said at a Sydney conference. “Obviously, that can’t continue forever.”

Ray White real estate agent Cameron Airlie said it was a seller’s market.

“There are some homes that are ­selling pre-auction and off-market and not even going online or in the paper,” he said.

Meriton Group national sales manager James Sialepis said his company wasn’t experiencing any significant increase in investor selling or let-up in investor buying. “We’ve actually seen investors increase as a percentage [of total sales,” he said. “Overall numbers are up from investors.”

Economists across the property sector were mixed after the release of Friday’s home loan data, but certainly took a more subdued outlook.

JP Morgan economist Ben Jarman said that while one month of data is hardly a trend the RBA rhetoric could certainly be having an impact.

“RBA officials would therefore be unlikely to declare victory on one month’s worth of data, but it does appear that the trend in investor lending is decelerating,” Mr Jarman said in a note released Friday.

Westpac economist Matthew Hassan said the loan figures confirmed a tempering in investment demand.

“The investor segment remains harder to predict although the August data suggests recent renewed strength in this area is not quite as explosive as the original July figures had indicated,” Mr Hassan said.

The Australian Financial Review

[greengiraffe]

http://www.valuebuddies.com/thread-3519-...l#pid96726

Any relaxation of migration policy to Australia will have positive impact on the property market...

[greengiraffe]

Flood of China cash to sow the seeds of a hundred towers
Simon Johanson
2483 words
11 Oct 2014
The Age
AGEE
English
© 2014 Copyright John Fairfax Holdings Limited. Factiva.Gateway.Messages.Archive.V1_0.ELink
Cover Story

Will the flow of housing investment money be a problem or a solution for Australia? Simon Johanson evaluates.

In a sleek black display room in downtown Melbourne, Adrian Sum is getting ready to launch construction of his first joint-venture Australian apartment project.

Mr Sum controls the purse strings of one of China's largest property developers, and the striking 63-level, 633-unit high-rise Eq Tower is state-owned Sino Ocean Land's first development foray outside the People's Republic.

It's a "defining moment for Melbourne", the tower's website states. That may be truer than the marketeers realise.

By Mr Sum's standards, Eq is small. His Beijing-based company's average property project is 10 times Eq's size, with the largest reaching 1 million square metres, roughly the size of eight full city office blocks.

Happy but not satisfied with his initial investment, Mr Sum is already on the lookout for more Australian assets. He also has a $200 million mandate to seed an office fund over the next year and, with joint-venture partner ICD Property, is eyeing other opportunities in Sydney.

"Because the Chinese capital is huge and the direction to go overseas is quite clear, that means that this will accumulate," Mr Sum says.

He's not the only one. A new Chinese entrant, Sichuan-based Xiang Xing Group, this week spent $35 million buying a development-ready site in Melbourne's Southbank.

Another huge state-owned enterprise, Shanghai-based Greenland Holding Group, already has four projects on its books worth $1.4 billion.

Its signature $600 million tower on the former Sydney Water Board site will become the city's tallest residential building.

In North Ryde, China's richest woman, 33-year-old heiress Yang Huiyan, is heading up Country Gardens' $500 million project, and Fuxing Huiyu Real Estate has launched apartments worth $550 million in Parramatta.

Chinese investors are aggressively lifting their Australian residential and commercial real estate investment at a time when the Reserve Bank is warning bubbly property markets could be hit with a price correction.

Alarmed by the property frenzy in Sydney, Melbourne and parts of Brisbane, the Reserve Bank hit the headlines two weeks ago, putting banks on notice they were being monitored and potentially facing tougher controls, so-called macro-prudential tools or constraints on lending. It was reacting to momentum that has been building since this time last year, when it issued another warning about the explosive growth of self-managed superannuation funds' property debts and the risk they posed to the country's financial system.

That, in turn, kicked off a familiar bubble debate which has played out over the intervening 12 months. "No housing bubble here, says Hockey", a 2013 headline read.

Foreign investment has become an even greater force in driving up prices over the past six months, the property industry believes.

The October Australian Property Institute Property Directions survey found 96 per cent of Sydney respondents felt foreign investment was a significant driver, up from the 88 per cent it registered in May.

Australia's buoyant property market shows no sign of abating, pushed by fierce competition and local and international investors' enthusiasm.

All 159 apartments in Lend Lease's first release of Sydney's Barangaroo development sold out at an early Saturday morning launch in August, including the penthouse, which went for $10.5 million to an Australian expat living in Geneva.

Spurred by a record 15-month run of historically low interest rates, Australian dwelling values rose 9.3 per cent over the 12 months to September. Sydney's homes rose 4.3 per cent and Melbourne's 8.1 per cent over the same period, RP Data figures show.

Investors paused for breath in August, housing finance data shows, with loans falling slightly by 0.9 per cent. But debt for new dwellings continued its upward trajectory, rising a healthy 2.5 per cent.

Adding to the Reserve's headache will be the latest housing debt data. It shows the average Australian household's ratio of debt to disposable income, or the proportion of wages spent servicing mortgages, has hit a record high.

Some property observers maintain the current frothy market is not an evolution but a revolution that is here to stay. With the world's wealth funnelling in, it is not difficult to see why.

Australia's property market is operating in an international context now, says Sam Nathan, a former analyst at Charter Keck Cramer. Sydney and Melbourne are on a par with other global cities where apartment markets, particularly in city centres, are "now driven by geopolitical influences as international developers diversify from their country and market of origin", he says.

London's huge £8 billion ($14.7 billion) redevelopment of the Battersea Power Station is being led by Malaysian firm S P Setia Berhad, which is also building the upmarket Parque apartments at 555 St Kilda Road in Melbourne.

When Australia emerged from the 2008 global financial crisis with a stable economy and one of the strongest property markets in the world, it became a tempting foreign-investment target.

The investment trickle became a flood as prices racheted up in London, and Singapore - amid fears of the island city's housing overheating - introduced restrictions on local and foreign ownership. They were soon followed by Hong Kong adding an extra 15 per cent stamp duty on overseas buyers and Canada cutting its millionaire visa program.

Aided by Australia's liberal foreign-investment rules which allow unlimited sales of new homes, Chinese investors and newly arrived immigrants spent $24 billion on Australian residential real estate over the past seven years, a well-publicised Credit Suisse bank report estimates.

And they will spend nearly double that, another $44 billion, over the next seven, starting with about $5 billion this year, it says.

The home-buying spree does not include other transactions.

Across all other sectors, excluding residential real estate, China last year spent $11.1 billion, second only to its direct investment in America, KPMG and the University of Sydney's Demystifying Chinese Investment in Australia index shows.

Most went to buying Victorian electricity assets, gas or mining deals around the country, with commercial real estate taking a relatively small 14 per cent share.

The rise of Asian property investment over the past five years is different to the wave of Japanese capital that washed through the Gold Coast and other Australian regions in the late 1980s, investment bankers CLSA say.

That boom-to-bust cycle saw investment by highly leveraged, yield-chasing Japanese corporations rise from zero to $65 billion in the space of a few years, only to collapse again by 70 per cent in 1992, with billions eventually wiped off their balance sheets.

In Queensland, particularly, the pain was felt for years.

International agency CBRE says the source of global investment flows into Australia has inverted over the past two years, with Asian capital now taking two-thirds of total property investment and other countries one-third.

"The mix in the source of capital to Asia is likely to continue, with more capital emerging from Asian markets and Australia attracting an above-weight share of these flows," its most recent Capital Attraction report says. It is an investment thesis that Mr Sum supports.

For the past two years China's central government has been relaxing requirements for outbound investments that require its approval.

"They know that to invest overseas can sometimes serve as risk management to balance their portfolio. This is not just happening to individuals, the whole country shares in this kind of mentality," Mr Sum says. "It is just the beginning of a long-term vision, this goal to go overseas.

"Even the corporates, like insurance companies, are starting to allocate a certain percentage of their investment portfolio into different overseas markets."

A new raft of easing policies will take effect this week, Savills' Hong Kong-based research director Simon Smith said this week. They are likely to further spur the flow of money heading overseas looking for better returns.

China has been booming for a decade but is now showing signs of slowing. "Now in our own market, more or less, we have reached certain capacity," Mr Sum says.

Its housing is in oversupply. The number of apartments in Shanghai is expected to double next year to total 1.1 million square metres. One new project in Shanghai's redevelopment precinct is the size of both Melbourne and Sydney's CBDs put together, Mr Smith says.

As a result, house prices, which rose to record highs for five consecutive years, are now experiencing a sharp deceleration.

China's developers are being encouraged to go overseas and get experience with other countries' rules, regulations and cultures, either on their own or in joint ventures. "Their main hurdles are lack of expertise and capability, so they are just dipping a toe in the market. They want to get practice," Mr Smith says, and they can "afford to fail".

The capacity of large Asian firms to self-finance, build and sell Sydney and Melbourne apartments to overseas buyers has radically changed the dynamics of the property market, CBRE's Mark Wizel says.

"The motivation of the developer and apartment buyer are aligned," Mr Wizel says. "The part that nobody really saw was the explosion of interest from mum and dad Chinese investors, who are buying apartments off-the-plan with the same level of aggression and vigour as the developers are buying land."

Overseas property is a prized asset for wealthy Chinese keen to park their money and mitigate the economic and political risk of having it tied up in the People's Republic.

Vancouver, London, Sydney and now Melbourne are the cities of choice. Feeding their desire is a passion for property that even surpasses Australia's love of realty.

An astonishing 10 million of China's newly minted top-income families aspire to emigrate here, CLSA estimates in an August report, Chinese Investment and Oz Housing.

Chinese nationals were the second-largest group of permanent migrants behind British citizens last year, and made up the largest share of international students, according to Australian government figures.

Servicing just half of that desire would fill Australia's current annual net overseas migration quota for the next 61 years.

"Their motivations aren't always about saving. A lot of Chinese have an end goal to emigrate here," says Joseph Zaja, whose Ausin Group is on target to sell 2000 Australian apartments and new homes to Chinese buyers this year.

"The majority are very conservative. They're buying to diversify their wealth into an established property market and economy such as Australia."

They want clean air, a good education and a solid legal system.

"Chinese residents want to emigrate to English-speaking countries, where there is a strong common law process. A good education system is essential and, as China's pollution problems escalate, a clean environment is becoming more important," CLSA's report says.

"I don't think there's any chance of it ending any time soon," Mr Wizel says.

Forty per cent of Eq Tower was sold to offshore investors, a not uncommon occurrence in today's international market.

They are a big factor even for local developers. Offshore buyers take between 13 and 20 per cent of Meriton's apartments without any direct marketing, Sydney billionaire Harry Triguboff says.

Within two years the proportion of overseas buyers in Australand's developments has risen from 5 to 18 per cent, executive general manager of residential Rod Fehring says. "It's quite a substantial change because Sydney has come alight. It's always been an attractive location for investment and, surprise surprise, the projects that we're producing are attracting offshore interest," he says.

Melbourne's skyline will blossom with another 42 new skyscrapers to cater for demand if the state government approves all current proposals over 25,000 square metres on its books when there are already fears of a big oversupply.

Amid the hum of activity, there are warning signs of overreach.

In echoes of Queensland's previous Asian-led property boom, one of China's largest property developers, Dalian Wanda - headed by the country's richest man, the flamboyant and acquisitive Wang Jianlin - will splash out $1.7 billion on local real estate, starting by developing the Gold Coast's Jewel high-rise and hotel complex.

Mr Jianlin's ambitious international expansion has seen him purchase the US' largest movie chain, AMC Theatres, Sunseeker Yachts and two London high-rises.

Aggressive buying, primarily by overseas developers, has seen Melbourne's CBD land prices triple over six years, Charter Keck Cramer figures show.

But the construction multiplier effect is supporting jobs, building material businesses and white good manufacturers, a sizeable section of the economy.

Some companies which have a strong pipeline of forward projects, such as Lend Lease, Fletcher Building, Mirvac and Goodman, stand to benefit most from the boom. "Goodman may seem like an odd choice for a residential beneficiary, but it has identified that it can develop 35,000 apartments in Sydney and Melbourne, converting from its inner-ring industrial assets," CLSA says.

For Mr Sum's company, Australia is the first stop in its global expansion. "We are not doing the investment decisions in a haphazard or subjective way," he says. "China has reached another stage. They have got to consider overseas investments. It's a new beginning; $200 million is a humble figure but it is talking about our commitment."

Chasing the dragon

Developer

Greenland Holding Group

Development

Sydney Water Board site, Sydney

$600 million.

Developer

Sino Ocean Land

Development

Eq Tower, Melbourne

63 levels

633 units.

Developer

S P Setia Berha

Development

Parque,

Melbourne

332 apartments,

19 storeys.

China

No full ownership of residential property or land (citizens usually buy 70-year leases). Foreigners must work or study in China for more than a year to buy property. In Hong Kong they pay an additional 15 per cent stamp duty.

Singapore

Foreigners cannot buy private residential property. They can buy apartments in approved buildings but must pay an additional stamp duty of 15 per cent.

Indonesia

Foreigners cannot own freehold property. They can buy apartments but the property title remains with the developer.

Japan

No restrictions on overseas ownership of land or buildings.

Vietnam

Foreigners can buy apartments (but not houses) for a duration of 50 years.

Malaysia

Since this year, foreigners can buy property valued over $330,000 but must get government approval.

India

Non-resident foreigners cannot purchase property.

Resident foreigners can buy property subject to various caveats.

Australia

Foreigners can buy new property, both apartments and houses. They cannot buy established dwellings.


Fairfax Media Management Pty Limited

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