Chinese foreign investors who abandoned the Australian property market last financial year could soon return, according to real estate agents and analysts who say enquiries and sales are on the rise.
But they predict Australian property is likely to be a more attractive option for overseas buyers who want to move here and buy land or large homes when our borders reopen, rather than foreign investors who face high taxes.
Australian Foreign Investment Review Board data shows that amid political tensions with China and COVID lockdowns, investment in Australian real estate from China declined significantly from its peak of almost $32 billion in 2015-16 to $7.1 billion in 2019-20.
Chinese buyers of commercial and residential real estate now sit behind buyers from the United States ($13.1 billion) and Singapore ($9.5 billion).
"When [Australia's] borders open, we will see a flood of people coming back to buy properties in Australia," says Monika Tu, founder and director of Black Diamondz Property.
Ms Tu's clients are mainly Chinese citizens with Australian residency working and living abroad.
Ms Tu says when COVID hit, and political tensions with China rose, investment dipped.
But she says now enquiries, and sales, for $10-million-plus homes, are back up as foreign buyers with Australian residency seek to return.
"Previously, you know, probably 90 per cent of our overseas buyers [were] from China," she says, adding that now in they are also coming from Singapore, Hong Kong, the United States and the United Kingdom.
Ms Tu says the view of her clients is that Australia managed the pandemic successfully, and is a safe place to live.
In addition, she notes, the exchange rate is currently in their favour.
"If you look at [Australia's] prices, compared to Japan, to London, to New York, to Beijing and Shanghai, we are actually quite reasonable," Ms Tu says.
But some of her clients are placing tentative offers and won't close the deal until borders open and they can return to see the property.
"If you [are going to] buy a $20 million, $30 million home … you still want to feel and touch, right?," she asks rhetorically.
"We have good offers, but they are waiting to come back and to settle or to exchange the contract."
In Melbourne's eastern suburb of Box Hill, sales and marketing director, CBD Development, Ricky Chen is seeing enquiries pick up again.
The company he works for is behind mixed-use development called Trio, which is scheduled to be built by next year and will include high-rise apartments, hotels and retail space.
Mr Chen says enquiries from overseas buyers dropped by 70 per cent last financial year but are on the rise again as foreigners seek to retire in Australia or to send their kids here to study.
"February to June [this year], we have seen large numbers of inquiries…from China, from South Asia and the US market," he says.
These buyers, he says, are seeking new, larger-sized apartments with easy access to facilities, and are turning to Australia, which is seen as a safe place to live.
Martin North, principal of property research firm Digital Finance Analytics, also notes there's been a swing away from foreigners looking to invest to people wanting to move here.
"They are either people returning [to live in Australia] or coming because of the lifestyle," Mr North says.
Previously they were after apartments, but now they are more interested in buying land and larger properties, he says.
If agents and analysts are right in predicting more people will come from overseas to live here once our borders reopen, that will boost competition in an already busy housing market.
CoreLogic data shows that Australian house prices have increased by 13.5 per cent over the year to June, led by gains in Darwin, Hobart, Canberra and Sydney.
That's the highest annual growth rate nationally since April 2004.
Houses have been more popular with buyers, rising more than 15 per cent compared to units, which increased by 6.8 per cent.
Mr North says this time around the competition from foreign buyers will be for bigger and more expensive homes.
"A few years ago, there was definitely direct contention between property investors and first-home buyers," he says.
But Mr North doesn't predict the numbers of foreign buyers will be as strong as they were at their peak in 2015-16.
"I don't see the naked investment we had, say, five years ago, particularly from the South-East Asian nations, being the same again," Mr North says.
"The world has changed, the political landscape has changed, the financial landscape has changed."