Foreign Chinese buyers may now be priced out of the booming Sydney and Melbourne property markets according to Real Estate agency PRD Nationwide.
In recent weeks, market players have noticed a gradual pull out of Chinese buyers and are racking their brains to understand why. The worrying pull out for property proponents, have led to a cooling market.
The PRD Nationwide Australia Economic and Property Report shoots down the notion that all foreign Chinese buyers are uber wealthy.
Asti Diaswati, PRD Nationwide’s national research manager told the Domain, “There’s this myth that foreign investors are all ultra-net worth, super rich and can afford penthouses, which is not the case,”
“I would say at least half to 60 per cent of foreign investors coming are ‘ordinary’ in the sense that they have a $500,000-to-$600,000 budget.”
The Sydney property market has seen annual double-digit gains in recent years and with a median house price now in-excess of $1 million, it is the world’s third most expensive property market according to investment bank UBS. Only Hong Kong and London now have more expensive property markets.
Real estate agents are now pondering who is left to sell too, with more and more auctions passed in. Australians have long been priced out of the Sydney market, with the Housing Industry of Australia suggesting last week that households now need to earn 1.74 times the average full time adult wage to meet loan repayments, despite interest rates being at record lows.
» Even foreign investors are struggling to afford Sydney prices – The Domain, 2nd November 2015.
» Sydney placed on global housing bubble risk list – Bloomberg, 1st November 2015.
» London, Hong Kong most at risk of housing bubble, UBS says – The Financial Review, 30th October 2015.
» It now costs $4,000 A MONTH to pay the mortgage on an average house in Sydney, and affordability is plunging across the country… – The Daily Mail, Australia, 31st October 2015.