Bamboo bubble: Chinese investors swarm

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.

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.

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.

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.

Read more here: SMH


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