A report by Domain revealed that Chinese companies acquired nearly 40% of the residential development sites offered in Australia last year. Overall, the offering amounted to a total of $5 billion. This trend indicated that many Chinese developers are purchasing properties in remote locations of Sydney and Melbourne.
Chinese developers snapped up a total of $2.4 billion of residential properties in 2016, according to Knight Frank’s “The Rise of Chinese Developers in Australia” report. The figure corresponded to 38% of the total value of sites sold. Michelle Ciesielski, Knight Frank’s Chief, said Chinese developers only picked up 12% of the total value of the properties sold in 2015. Imagine the stark difference in just one year. She added that sales to Chinese developers and investors were still 11.2% lower than the record high reported in 2014. It is obvious that their influence has extremely improved since then. At first, the Chinese wanted projects for high-rise developments. However, they eventually moved towards lower-density developments after they started acquiring land in the country. The size of the average property they bought increased by more than 18 times to 21,045 square meters in 2016.
Many of them made their presence known in their chosen suburbs last year. Take for example, Poly Group. The company purchased a 30,610 square meter property in Werrington where it plans to build 68 homes. It is located nearly 50 kilometers West of Sydney’s Central Business District. It also acquired developments in Epping, Melbourne CBD, and South Yarra.
Dahua Group is another company that is taking up properties outside Sydney CBD. It has a project about 45 kilometers south-west of Bardia and another one in about 75 kilometers from the CBD in Menangle Park. It also has a project 25 kilometers away from the south-west of Melbourne in Point Cook. Chiwayland Group is another group, which has apartment developments in Roseville and Parramatta. Another Chinese developer is Nundah and Toowong who also has projects in Brisbane. It purchased a 114,270 square meter property in Caddens for $40 million. It plans to build about 400 apartments and 364 townhouses that are intended for local buyers and all the others who may be interested to take up residence once they are completed.
This trend has continued this year. In January, another Chinese developer acquired 12.5 hectares of land in Sydney’s north-west Baulkham Hills for nearly $90 million. The company, Aqualand wants to build around 71 houses and 75 medium-density homes in that area. According to BIS Shrapnel senior manager residential Angie Zigomanis, it was not common to see foreign developers acquire several properties at any one time. However, they said that the fact remains that developers are starting to find other options rather than build apartments. Since Chinese companies want to develop houses and land estates, they need vast lands and that is one reason why they are turning to the suburbs for their projects. If not for them, these lands would have remained as stale ground.