Dose

Fairfax: The Yellow Peril is upon us

496 posts in this topic

Similar to the Japanese in QLD in the 1980's!

 

China-based estate agencies selling Australian properties through inflated two-tiered pricing schemes

 

 

China-based estate agencies are selling Australian properties through a two-tiered pricing structure with inflated prices to China-based buyers, according to Michael Yang, the chief of GiFang.com, the largest Chinese language property site in Australia.

 
"Some agents sell at more inflated prices to China-based buyers," he noted.
 
"When developers promote house and land packages to buyers in China for areas such as Point Cook, Sanctuary Lakes and Tarneit, the land component of the package can sometimes have a higher price in China.
 
"They are “exclusive lots” for Chinese buyers that are only promoted in China," he noted in a blog published on the China Spectator website.
 
"It is believed that one in 10 China-based agents are involved in selling Australian properties according to a two-tiered pricing structure. 
 
"The misconduct of Chinese agents also contributes to the perception that Chinese buyers are willing to pay for above the market price."...

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SMH: Chinese developer to transform Parramatta

 

 

It's known for building mega communities in the Chinese city of Wuhan where thousands of residents live in 50-storey towers.

It's a real estate giant that develops more than 1 million square metres of property a year and is part of a conglomerate that annually turns over more than $8 billion.

And it has arrived in Sydney with plans to dramatically develop the banks of the Parramatta River with a $550 million project comprising 774 apartments starting next month.

Starryland Australia, an offshoot of China's Fuxing Huiyu Real Estate Company, is building Promenade – an 11-tower, 12-storey development that will create a new "gateway" to Sydney's second city.

"Promenade is in keeping with the style of residential communities we create in China," Starryland Australia director Hao Liu said. "We want it to set a benchmark to establish our credentials in Sydney as a quality developer.”

The agent entrusted with selling the project, Irene Lau of Savills, said buyer interest had been strong.

"A lot of parents have their kids coming into Australia to study . . . so the parents say: 'OK, we can put them there'."

Local couples and retirees had also shown interest, Ms Lau said.

On Saturday the first two buildings comprising 124 apartments were offered to registered parties at the Park Royal in Parramatta.

All sold at the weekend with prices ranging from $399,000 for an "open plan" one-bedroom apartment to $900,000 for a three-bedroom unit.

A further 153 apartments will be offered at the official launch in late June when the display apartment has been built.

Compared with developments in China, Ms Lau said Promenade was small-time.

"In Wuhan they sell like 1000 units a day," she said.

Starryland Australia has no plans to stop at Parramatta. On top of its $58 million land acquisition in Sydney's west the firm has spent $18 million securing a prime development site in Melbourne's Southbank.

"They've come here and they want to be a long-term player in the market," Ms Lau said.

"They want to do big developments. They have many plans . . . and they have the money.

"Basically in China they are one of the big boys."

Mr Liu confirmed that the company was on the hunt for more prime development sites but said competition from other Chinese developers was fierce.

He said Fuxing Huiyu had picked Australia because of its stable market and immigration flows.

"It is a lot easier to emigrate to Australia than America or Europe," he said.

"We know that in Australia there is a big potential market as more and more Chinese emigrate."

Brian Caba, of Ray White Castle Hill, recently sold two townhouses next to the development and said the local response to the project had been positive.

"There is a large Asian community in Parramatta," he said.

"The restaurants and shops that will come with the development will likely boost prices in the area."

The development will sit next to the 2.3 hectare Baludarri Wetland, home to more than 60 bird species as well as 50 native plant varieties.

The west side of the project will look over Rangihou Reserve, which made local headlines last year when a sacred Maori burial ground was supposedly discovered.

It's a collaboration between Smart Design Studio, landscape architect Aspect and Starryland Australia.

Chinese-backed companies have been a large part of the apartment building boom that has gripped Sydney.

China's state-owned Greenland Group is now spending $600 million building Sydney's tallest residential tower. The Greenland Centre on Bathurst Street in the city will be 235 metres high and comprise 470 apartments when complete in 2017.

Chinese-backed Bridgehill Projects also made waves last year when it reportedly forked out more than $90 million for a 1.8 hectare plot in Zetland. The group has plans to build more than 400 apartments on the site, which will soon become the Green Square Town Centre. Bridgehill also has development sites in Mascot and Milsons Point.

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Nothing to see here, just another real-estate beatup, move along.

 

He said Fuxing Huiyu had picked Australia because of its stable market and immigration flows.

 

 

Seriously? Sounds like he could be related to Chodley Wontok.

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http://www.theage.domain.com.au/real-estate-news/hawthorn-mansion-sells-for-more-than-20-million-20140507-37vlt.html

 

Hawthorn’s extravagant Avon Court has sold for more than $20 million through RT Edgar.

...............

Listing agent Paul Pfeiffer from RT Edgar Toorak said the new owners were a Chinese family upgrading from Kew.

“They are also looking to buy three more homes for family and friends in Hawthorn or Toorak up to $30 million each,” he said.

 

I assume the FIRB is all over it.

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Ultra-wealthy Chinese will be sold Australian property for the first time at luxury expo

 

 

PROPERTY from Melbourne’s western suburbs will be sold alongside Lamborghinis and high-end jewellery at a Chinese luxury expo.

It will be the first time international real estate has been marketed at next weekend’s SR Luxfo event in Beijing, according to the operators of China based international real estate website Juwai.com.

Amit Miglani, chief executive of MIG Real Estate based in Melbourne’s western suburbs, will be trying to sell development and land sites worth between $10 million and $15 million from the city’s west at the event.

He will also be offering a number of “silent listings”, high-end property not being officially marketed for sale, from Melbourne, Sydney and the Gold Coast with expectations of prices up to $22 million.

The mix will include penthouses as well as brand new luxury homes in the suburbs.

“Chinese millionaires and billionaires will visit the Conference Centre at the Beijing International Hotel and for the first time see Melbourne property marketed alongside the world’s most expensive cars, jewellery, wine, timepieces and other luxury goods,” he said.

Currently in Beijing following a separate event last weekend, the Luxury Property Show, Mr Miglani said he was pursuing wealthy Chinese investors to get the best outcome for his vendors.

And he’s attempting to learn the language to do so.

“You don’t have to speak Chinese to succeed with these buyers, though I am trying to learn Chinese. That’s going to take a couple of years,” he said.

Andrew Taylor, co-chief executive of Juwai.com, said with Australia the second most popular choice for Chinese investors looking to buy overseas property “Australia has a good brand in China, as a place to live with a beautiful and protected natural environment”.

But the push to link Aussie property with luxury brands comes as the website’s data shows the UK is expected to later this year surpass Australia as the second-most popular investment country among mainland Chinese.

The US is firmly entrenched in top spot.

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FIRB relies on honesty and 'stern' speech to enforce foreign investment rules on housing

 

 

 

The Foreign Investment Review Board has revealed that it only has eight staff to look at the thousands of annual foreign purchases of Australian residential real estate. FIRB says most state land titles offices also do not routinely record the residency status of property buyers, meaning it is largely relying on the honesty of overseas buyers to seek approval for their purchase. However, despite the possibility that thousands of foreign purchases are going undeclared, the board's chairman says he believes many Australians are mistaking local buyers with an Asian background for overseas investors creating a false impression of how many foreign purchasers are in the market.

 

 

I could have sworn I read that FIRB and a Parliamentary Enquiry had dismissed the Yellow Peril concerns as locals of Chinese descent buying property... I couldn't find a link besides this one though. 

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50,000 a year.

If they close this off there wouldn't be too many houses in Australia they can buy for 50k.

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http://www.cbc.ca/news/canada/british-columbia/vancouver-real-estate-luxury-market-continues-to-boom-1.2700032

 

Surprise, surprise...now the Vancouver real estate agents are saying blocking (wealthy Chinese) investors has had no effect on price in Vancouver.   We'll probably never know as the price movements and related information are controlled by the real estate lobby over there as well.

 

 

The rising demand for homes pushed sales significantly over asking price, with 30 per cent of detached single family homes and 19 per cent of attached homes in the $1 million to $2 million range bought for over list price. Homes were also on the market fewer days before they sold.

Concerns that the elimination of the Immigrant Investor Program — that offered visas to business people whose net worth totalled at least $1.6 million and who were willing to lend the Canadian government $800,000 interest-free over the course of five years — would adversely affect the market, appear to have come to naught.

According to the report, the luxury market has seen “no impact” from the change, and international demand is expected to remain strong

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I can't remember if the Japanese did the same after their bubble popped back around 1990. They were certainly keen on QLD property in the 1980's.

 

China's rich look abroad as home prices fall

 

 

BEIJING (Reuters) - Rattled by falling home prices, some of the wealthiest Chinese are paring their property investments and turning to private equity or overseas holiday homes, a sign of fading hopes that the once red-hot market can bounce back any time soon.

"Smart money" checking the exit is a bad omen for any market, especially one considered frothy after a five-year record-breaking bull run, but wealth managers, brokers and analysts say there is no reason for alarm yet.

First, the rich are not in a full retreat mode but rather looking to spread the risks more evenly, money managers say.

"There are indeed clients choosing to reduce their exposure to the property sector, but it's not a common phenomenon," said an investment strategist at a private banking arm of a large state-owned bank. The banker declined to be named because he was not authorised to speak to the media.

Bankers also don't expect investors to simply dump their real estate because the market cools.

"Unless someone has an especially big portion of their assets invested in property, he or she would not be in a hurry to sell," said Wang Jing, a deputy general manager at China Merchants Bank's private banking arm. "They would choose to rent their houses to deal with their cash-flow problems."

Furthermore, millions of middle-class Chinese, not rich enough to invest abroad and frustrated by official limits on bank deposit rates that barely beat inflation continue to see buying a second or third home as the best investment.

Confronted with talk of more price cuts by developers to revive ebbing sales, those investors either hold on to cash and wait or focus more on megacities like Shanghai or Beijing and avoid smaller markets that struggle with oversupply.


MINORITY VIEW

"The choice of the rich is the view of a minority. We do not think it represents a trend for the masses in future," said Zhao Dazhen, a property analyst at CEBM Group, an investment research firm in Shanghai.

    "Market uncertainty is keeping most people on the sidelines. Potential buyers will be back once there are signs of a recovery."

Data appear to confirm that analysis, with new yuan deposits nearly tripling in June to 3.8 trillion, the biggest jump in at least 12 months. The central bank's second-quarter consumer survey also showed property has not lost its appeal: 14 percent of households said they wanted to buy a new home, roughly the same as a year ago.

By contrast, the rich, investment advisers at their side, increasingly choose to shift their money elsewhere in search for better returns rather than wait for prices to level off.

China's wealthy have dabbled in foreign real estate in the past and fears that the market has gone too are also not exactly new.

What is new is a growing sense that despite a pick-up in home sales volumes last month, the second monthly decline in prices in June might be the beginning of a longer slide.

Well-heeled investors are also shifting funds abroad faster than ever. Realtors in New York, Sydney or London all report how over the past year Chinese buyers became top foreign investors in their markets, snapping up high-end prestige properties.

Data from the National Association of Realtors, a  U.S. trade association, showed that the Chinese accounted for about 16 percent of foreign home buyers in the United States in the year ending March 2014, up from 12 percent in 2013 and 2012.

Compared with the size of the domestic property market - 8.1 trillion yuan (760 billion pounds) in sales last year -- outflows are still relatively small and a central bank probe into an offshore investment scheme offered by one of China's major banks might curb investor appetite for foreign assets.

For optimists the limited scale of the foreign property investment and firm belief of many Chinese that a home remains the best store of value suggest that China's housing market is in a "natural correction" rather than on the brink of a slump.


STILL A BUY

Interviews with 10 would-be investors and property brokers in showrooms in Beijing, Shanghai and the southern city of Hangzhou convey that sense of confidence.

"Of course I will buy houses for investment," says former investment industry professional Wu Linzhi, 52, while browsing house for sale ads at a real estate broker in Shanghai.

"Investing in property is one of the best ways to preserve the value of your cash. This is especially true in China's biggest cities such as Shanghai."

Whether China faces a severe property market supply overhang is hotly debated. According to one expert about 20 percent of apartments in Chinese cities stand empty, but others say the figure is exaggerated. For one, it may include homes bought as financial investment where owners have no intention to move in or rent.

Central Bank Governor Zhou Xiaochuan recently admitted that policymakers are not sure themselves whether the property market is suffering from a supply glut or simply going through a soft patch caused by the slowing economy and financial stress.

For some well-heeled Chinese bad news is just another reason to call a realtor.

"I used to buy some wealth management products but stopped immediately after hearing there was a default," said Yu Li, a 43-year-old catering business executive.

"So I just put most of my money into the property market. You cannot save your extra money in banks. Banks themselves are in debt, would you dare to give your money to them?"

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Chinese property story must be getting old.

 

http://www.smh.com.au/business/property/singaporean-investors-hungry-for-a-piece-of-the-australian-housing-market-20140725-zsvj9.html

 

 

 

‘‘Singaporeans are hungry for Australian property,’’ says Adam Sparkes, ​director of sales at property developer Crown Group International, which has $3.5 billion in development sites across Australia.
"All the right factors are in Singapore," said Brian Eng, a foreign real estate manager at ​Singapore real estate firm ​Jalin. "A strong exchange rate, a robust economy and a love for the Australian lifestyle."
“Singaporeans have a love affair with Australian properties, they’ve studied there before, worked in these cities.” Mr Eng said.
“In Singapore if you get a 2 to 3 per cent rental return it’s considered very lucky,” says Singaporean property author, Vina Ip. This makes the 6 per cent return on Australian properties look attractive, she adds.
As long as the prohibitive conditions on the purchase of second homes exists in Singapore and the economic climate remains favourable, Ms Ip believes that Singaporeans will continue to look to Australian property as an investment haven, spurred on by generous rental guarantees from hungry Australian developers.

 

While there are lingering concerns that offshore interest in property could be pricing out first home buyers, many say this just dosen’t reflect reality.

‘‘Most first home buyers buy established, rather than new, dwellings; the first home buyer’s average purchase price of $328,000 is far below the price point of most foreign purchases,” UBS’ Mr Haslem says.

 

 

Considering the SMH is running Saturday front page (online) featuring a 23 year old who does not fear a $500k mortgage and is just "getting on with it" I'd guess he was lucky to get that one bedder unit before they were all sold out!

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Watch the video. It does remind me of the Japanese on QLD in the 1980's.

SMH: Singaporean investors hungry for a piece of the Australian housing market

 

 

In glamorous five star hotels across Singapore every weekend, property investors are lining up to buy a slice of the Australian dream.

Cashed up investors are piling into packed presentations at venues such as the famous St Regis hotel about shiny apartments being built from Sydney to Melbourne. Newspaper ads spruiking waterfront developments are commonplace.

“Buy where the local Australians are buying,” says ​​one ad in Singapore's Straits Times.

Singaporean investors are being lured by a combination of new, prohibitive taxes on second homes in the island state, record low interest rates, a strong ​currency and promises of attractive returns from Australian developers.

‘‘Singaporeans are hungry for Australian property,’’ says Adam Sparkes, ​director of sales at property developer Crown Group International, which has $3.5 billion in development sites across Australia.

The Singaporean sales pitch comes amid increased focus over offshore buyers snapping up local property. This is stoking fears that prices in an already heated market could be pushed up further.

Foreign investment now accounts for about 13 per cent of turnover in the Australian ​real estate market, according to UBS economist Scott Haslam. He says offshore investment in housing nearly doubled over the past year – most of which came from China.

Even so, there is often confusion about what offshore buyers can do. Under Australia’s foreign investment laws, non-residents are permitted to buy newly built dwellings – after gaining Foreign Investment Review Board approval – but cannot buy established homes.

The latest available figures from the FIRB for the 2012-13 financial year, ​rank Singapore is the fourth-biggest source of foreign funds invested in Australian real estate, with about $2 billion spent. China was the biggest, with almost three times that much.

Adam Sparkes expects Singaporeans to ​make up as much as 10 per cent of ​its client base by next year​, and ​Singaporean desire to get a foothold in the Australian market has spurred ​it ​to open an office on the Asian island.

"All the right factors are in Singapore," said Brian Eng, a foreign real estate manager at ​Singapore real estate firm ​Jalin. "A strong exchange rate, a robust economy and a love for the Australian lifestyle." 

New laws introduced in the city state last year ​slug a 15 per cent tax on second homes.

The tax was designed to prevent first home buyers in Singapore, where land is restricted, from being completely forced out of the market. The rules do not apply to properties purchased offshore.

​And​ while Chinese investors may still be the most significant foreign presence ​in the Australian property market, developers and property industry executives say Singaporeans are emerging as ​serious players​.

Brian Eng believes the connection has as much to do with emotional ties as it does financial incentives.

“Singaporeans have a love affair with Australian properties, they’ve studied there before, worked in these cities.” Mr Eng said. “It reminds them of good times, it’s not uncommon for them to stay and work in Australia for 10 years after they have finished their studies.”

Still, prospective buyers are also being told to do their due diligence. 

Misleading ads used to spruik Sydney

Singapore-based property author Vina Ip is concerned that the rosy picture painted by Australian developers in glamorous presentations at the St Regis hotel is tainted by rental guarantees and other incentives.

“I always warn people to actually go to see the properties themselves, go for a trip and see where its located, talk to the landlords and see if the rental return is actually that good,” Ms Ip said.

Some ads include location pitches that could best be described as generous.

The presentation for Mirvac’s Harold Park complex in Glebe, though not to scale, gives the impression that the site of the former trot raceway is bigger than the large Sydney suburbs of Leichhardt and Annandale combined. It also points out it is conveniently located next to the harbour foreshore. As most in the inner city suburb know, access to the harbour can be tricky.   

Another ad on Singapore property site, Jalin, for Australand’s Botanica complex in Lidcombe describes it as being in Sydney’s inner west.

By most definitions, Lidcombe falls well to the west of the boundaries of the cosmopolitan suburbs of the inner city Sydney.

Offers of exclusive access also abound.

“Only available to Singapore investors through IP Global, exceptional terms” an ad for Brisbane development Newstead Towers read last week – just one of a number of similar offers across the Australian east coast.

Australian properties advertised in Singapore come with guarantees of a minimum 6 per cent annual rental return and a waiving of stamp duties and legal fees. By most measures, however, these figures represent a premium to the market.

Rental yields in apartments in Melbourne and Sydney ranged between 4.8 and 5 per cent in the March quarter, according to property listing business Domain.    

“A 6 per cent guarantee would indicate a top up from the developer,’’ said Domain senior economist Andrew Wilson.

Tim Lawless, a director of property research firm RP Data notes a yield of 6 per cent ‘‘is well above market’’.

“When the guarantee period expires, in all likelihood, the purchaser will be left holding an asset on a lower yield,” he says.

The developers offering such guarantees, including Kokoda Property in central Melbourne, Newstead in Brisbane and their Singaporean agent, Reapfield Property Consultants, all declined to comment.

Even so, these risks haven’t deterred Singaporean investors.

“In Singapore if you get a 2 to 3 per cent rental return it’s considered very lucky,” says Singaporean property author, Vina Ip. This makes the 6 per cent return on Australian properties look attractive, she adds.

Low rates attracting buyers

But apart from the big ticket promises of Australian developers, ​and the new, big taxes on investment properties, there are other reasons for the ​interest from Singaporean ​investors​.

Singaporeans seeking to buy in Australia are able to borrow at significantly lower interest rates than their local counterparts. 

ANZ’s Singapore unit is currently advertising a standard variable interest rate of 1.17 per cent. By contrast, ANZ Australia’s standard variable interest rate currently sits at 5.88 per cent. 

This interest rate differential looks likely to continue, with the Singaporean Central bank setting the cash rate in June at 0.21 per cent, compared with Australia’s target of 2.5 per cent. At the same time, the Singapore dollar and Australian dollar have traditionally traded in a relatively tight range, minimising currency risk.

With Australian banks targeting foreign investors, a federal parliamentary inquiry this week raised questions about the checks they are conducting on overseas buyers.

ANZ bank and Macquarie Group were asked to provide details to a broader House of Representatives economics committee inquiry into residential housing. The banks were asked what steps they took to ensure various foreign investment rules were followed.

Little effect on first home buyers

While there are lingering concerns that offshore interest in property could be pricing out first home buyers, many say this just dosen’t reflect reality.

‘‘Most first home buyers buy established, rather than new, dwellings; the first home buyer’s average purchase price of $328,000 is far below the price point of most foreign purchases,” UBS’ Mr Haslem says.

At the same time Reserve Bank research which found that first home buyers’ degree of competition with foreign buyers was ‘‘likely to be fairly small’’.

“We’re empathetic to the plight of first home buyers,” says Jessica Darnbrough, from mortgage broker Mortgage Choice. 

“But the reality is that at the end of the day, new properties are a good thing for the construction sector.”

New properties aren’t just coming from Australian developers. Singapore is bringing its own developers to town, with construction giant Hiap Hoe building two of Melbourne’s CBD’s largest developments, Marina Tower in Melbourne’s redeveloped Docklands area and another on Lonsdale St.

As long as the prohibitive conditions on the purchase of second homes exists in Singapore and the economic climate remains favourable, Ms Ip believes that Singaporeans will continue to look to Australian property as an investment haven, spurred on by generous rental guarantees from hungry Australian developers.

“They have no choice but to look overseas,” Ms Ip says.

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Where in Australia can you get 6% return on a rental? Maybe gross in a country town...

Certainly it is unusual.

I'm not sure I believe people would be happy with 2-3percent in singapore. If they are I'd love to know what drugs they are collectively smoking and why they don't just put their cash in the bank.

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Where in Australia can you get 6% return on a rental? Maybe gross in a country town...

Certainly it is unusual.

I'm not sure I believe people would be happy with 2-3percent in singapore. If they are I'd love to know what drugs they are collectively smoking and why they don't just put their cash in the bank.

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Where in Australia can you get 6% return on a rental? Maybe gross in a country town...

Certainly it is unusual.

I'm not sure I believe people would be happy with 2-3percent in singapore. If they are I'd love to know what drugs they are collectively smoking and why they don't just put their cash in the bank.

It's the spin, it may not actually be true. See now even you believe 6% is possible...

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It's the spin, it may not actually be true. See now even you believe 6% is possible...

True.

Oddly enough when I have looked at this before towns that are too small for banks to lend more than 50pc on often have good rent returns.

To me it shows just how big a part of the problem that easy credit is.

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What a junket! Why do they need to fly to China for this when their own government stats will provide a more accurate answer?  :furious:

 

link

 

 

 

members of the Parliamentary into into foreign property investment will embark on a week long tour of China to help ascertain the degree of investment in Australian property...

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What a junket! Why do they need to fly to China for this when their own government stats will provide a more accurate answer? :furious:

link

I guess if they are going in to prosecute them it might be good?

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What a junket! :furious:

 

link

I love a good junket trip. It's usually just Sydney trips, so yawn - just go do the time on business and come straight home, sometimes just a day. But the $100+ a day I get for food certainly boosts my pay packet - I never spend that much. I've been lucky recently to go to conferences in Perth and Canberra and see friends or do some tourist stuff. 

 

Why do they need to fly to China for this when their own government stats will provide a more accurate answer?  

 

It's the vibe man!

 

But...

This is not the reason for the trip 

 

“I’m interested in exploring what happens in China. For example, are non-resident foreign investors able to purchase property in China?”.

I reckon one of the staff could spend 10 mins on Google to find this out. Ok they're public servants let's give them 10 hours. 

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Wasting money must be in the mission statement of all levels of government. 

 

The nearest 'minor' road to me - one lane in each direction and an extra parking lane on each side is being ripped up and relayed. Apparently it's necessary to relay ~2ks of road because there was a 3X5m section that had potholes. Of course this must be done at night, when during non peak day you could cross the road blind and only have a 10% chance of being hit by a car. 

 

No wonder we send our elected officials to China to discover what the exchange rate is..

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Do any of them have permanent residency, allowing them to buy established dwellings?!!!

 

SMH: Chinese student nabs apartments with Harbour Bridge views

 

 

A Chinese buyer who only saw a Kirribilli harbourfront apartment block on Saturday morning said he got a "fair" deal, the property selling for $300,000 under reserve.

The Chatswood student bought the two apartments at 2 Waruda Street for $4.3 million on behalf of his parents, who divide their time between Australia and China. During the auction, the student tried to knock out all competition with a $500,000 bid.

 "I loved the feel of it," the 22-year-old said. "I thought the price was fair, we have other properties we have bought in Sydney.

"The best part of this one is we can see the new year's fireworks from both balconies."

The 283-square-metre property – with each apartment having two double bedrooms, two car spaces and direct views of the Harbour Bridge – with waterfront parklands was one of 408 Sydney auctions listed to go under the hammer on Saturday.

With 310 of the results in by Saturday evening, the Domain Group put the clearance rate at 79.1 per cent. 

The new owners were one of five registered parties in the crowd of 45. They were up against two other Chinese buyers and two locals.

After one minute's silence after opening proceeding, Auction Works auctioneer Lorenzo Giunti took a first offer of $3.5 million. Even though Mr Giunti was happy to work with $100,000 increments, the next bid by the new owner of $500,000 took the price to $4 million.

Three bids later, and after gruelling negotiations with the vendors and other registered parties, it was called on the market. Despite the auctioneer confirming $10,000 raises were sufficient, there were no other takers.

Agents Steam Leung from Colliers International and Michael Zhu from House 18 World Square had more than 50 groups inspect, with 10 taking out contracts.

Mr Zhu said that, out of the six potential buyers from China, two flew into Sydney to inspect, while the others had local family or real estate representatives inspect on their behalf.

"Some Chinese buyers who flew to Sydney to have a look were disappointed because you can't see the Opera House, only see the Harbour Bridge," he said. "If you saw both Sydney icons, they said they would be prepared to pay between $8 million to $10 million easy.

"Most Chinese buyers don't know what to do with it, they prefer something to move in straight away.

"They like the location but don't know how to rebuild, negotiate with council and how to sort out everything. It has great redevelopment potential, with some wanting to build a stunning architectural home on the site while others are keen on the rental income stream."

He said the vendors ended up paying $30,000 for the local advertising during the five-week campaign and an extra $10,000 worth of advertising in Chinese circles.

The rental return for both apartments is $2100 a week. Mr Zhu said it last traded in 2011 for $3.15 million.

Another big result on the weekend was the sale of a three-bedroom, 129-square-metre apartment at 405/24-26 Clarke Street, Crows Nest, which went for $1.21 million, $110,000 above reserve. There were five registrations.

Auctioneer Rocky Bartolotto of Property Auction Services advised of two other huge results.

There was a crowd of more than 150 people at the auction of 3 Nowra Street at Campsie, which sold for $932,000, $152,000 over reserve. There were 10 registrations for the four-bedroom home sold by Francois Vassiliades of LJ Hooker Campsie.

A three-bedroom unit at 9/49 Charlotte Street in Ashfield sold for $725,000, which was $65,000 over reserve, by Domenic Bucciarelli of LJ Hooker Ashfield.

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Does it matter? What are FIRB going to do? Send out a deaf, blind & mute wheelchair bound investigator with a clip board and a blunt pencil?

 

or perhaps money in a brown paper bag is being used to settle differences in the interpretation of laws?

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