Chinese snap up Aussie trophy homes

According to Sydney-based agent Monika Tu, who specialises in selling properties to wealthy Chinese buyers and helping them to relocate, Australia is attractive to the Chinese because it is quite close to China and has a large Chinese community.
According to Sydney-based agent Monika Tu, who specialises in selling properties to wealthy Chinese buyers and helping them to relocate, Australia is attractive to the Chinese because it is quite close to China and has a large Chinese community.PHOTO: REUTERS

This year's priciest properties bought by wealthy Chinese, weak dollar the latest lure

When a luxurious six-storey mansion in Sydney sold for A$70 million (S$72 million) and set a record for Australia's highest property price, it came as little surprise the buyer was a Chinese-Australian mogul.

It was slightly more surprising when the billionaire buyer, Guangzhou-based property developer Zhou Zerong, known in Australia as Dr Chau Chak Wing, admitted he had not even seen the eastern suburbs property.

"I never saw the house, I don't know who the former owners were," he told Fairfax Media a few days after the deal last week.

The previous owner of Dr Chau's new mega-mansion was Mr James Packer, a casino tycoon who finished building the house for his family in 2013 just months before he and his wife separated.

Dr Chau, whose wealth was estimated to be US$2.2 billion (S$3.1 billion) by last year's Hurun China rich list, said his daughter had overseen the purchase.

"I have lived in my home in Sydney for a long time now, there are more children at home, grandchildren, so I wanted to move into something a little bigger," said Dr Chau, who has business interests in media, education and golf resorts, according to Fairfax.

As Australia's real estate market continues to boom, Chinese buyers have increasingly been on the hunt for these so-called "trophy homes".

A Sydney-based agent, Ms Monika Tu, who specialises in selling properties to wealthy Chinese buyers and helping them to relocate, said Australia had been attractive because of "the distance and the community".

"It is quite close to China here," she told The Straits Times. "The people are nice and there is a large Chinese community. The government is smart - its policies actually welcome foreign investment."

In Melbourne in April, an Australian record was set for the country's most expensive apartment: A$25 million for the 100th-floor penthouse of a skyscraper that is to be the southern hemisphere's tallest building. It was bought by an unnamed China-based businessman.

But the sales have added to concerns in Australia about the impact on the soaring property sector, which has left many domestic buyers struggling to enter the market.

Analysts say the latest lure for Chinese buyers - with Australia's stable economy and rising prices - is the weak dollar. In Sydney, house prices have risen by more than 40 per cent in the past three years but the increase is only about 10 per cent if paying with the yuan.

The recent growth in Chinese demand has triggered calls to restrict foreign ownership and to stop the central bank from keeping the dollar low. Australia's biggest property developer and its third-richest person, Mr Harry Triguboff, said the lower dollar was making property "too cheap".

Mr Triguboff, founder of Meriton Group, said Australia's central bank, the Reserve Bank of Australia, should end its efforts to try to keep the dollar low.

The bank has sought to cut interest rates to put downward pressure on the currency and boost the economy's non-resources sectors as a mining boom fades.

"But aren't we perhaps seeing our real estate becoming too cheap as a result," Mr Triguboff told The Australian newspaper.

The Treasurer, Mr Joe Hockey, has launched a crackdown on foreign investors who breach rules which ban non-residents or short-term visa holders from buying existing houses. Such buyers can purchase only new dwellings, off-the-plan properties, or vacant land for development.

"We are determined to enforce the rules and, where appropriate, make them even tighter," Mr Hockey told reporters last week. "Australia wants foreign investment, but we need to make sure that foreign investors comply with the laws."

Ms Tu, director of Black Diamondz, said the "trophy homes" are popular with Chinese buyers as they are typically close to good schools and are considered relatively cheap. Prices in Sydney may be soaring, she said, but they are still not as high as top-end homes in New York and London.

"If you compare it with other cities, it is not that expensive. The weakness of the Australian dollar helps a lot," said Ms Tu.

Aside from the Packer mansion, the two other most expensive property sales this year both went to Chinese buyers.

In May, the luxurious mansion Mandalay sold for A$39.9 million to an unnamed Chinese buyer with Australian residency in Point Piper, one of the city's most exclusive suburbs. Ms Tu helped to broker the deal. This sale was roughly equalled by the sale for about A$39 million of the Villa del Mare - a palatial-style 16,230 sq ft mansion overlooking the harbour, also in Point Piper. Controversially, the property was sold by self-made Chinese property tycoon Xu Jiayin, also known as Hui Ka Yan, who was forced to sell after the federal government declared his purchase unlawful because it breached foreign ownership rules.

The new buyer was Ms Lola Wang Li, a China-born Australian citizen who reportedly has strong connections in the Chinese-Australian business community.

Near these two mansions, Australia awaits the sale of a vast Victorian beachfront estate which is expected to set a new A$100 million-plus record. More a trophy manor than a trophy home, the agents will no doubt be trying to test its appeal to Chinese buyers.

A version of this article appeared in the print edition of The Straits Times on August 15, 2015, with the headline 'Chinese snap up Aussie trophy homes'. Print Edition | Subscribe