The implosion of China’s real estate sector has seen investment from the green dragon decline sharply and left several Australian apartment projects in limbo.
All just when more affordable housing is needed.
Chinese investment into Australian residential real estate plunged by $400 million from $A1.1 billion to $700 million in the September 2023 quarter (the latest available data), according to the Foreign Investment Review Board. FIRB reported that the number of approvals from Chinese buyers fell from 826 to 523. Chinese remained the largest foreign buyers, followed by Indian and Vietnamese property investors.
The decline by Chinese investors has been offset somewhat by an increase in investor interest from the Middle East, in particular from the United Arab Emirates (UAE), notes an award-winning architect.
The bilateral trade partnership between the UAE and Australia is resulting in more comfort to each partner, says Australian-based PLACE Studio’s CEO and co-founder James Alexander-Hatziplis.
“This comes in the wake of recent Chinese investor experiences investing here where they have been left holding underperforming investments,” he says.
“Middle Eastern investors are attracted to Australia by its strong rule of law, transparent regulatory framework, and high quality of life – providing a safe haven for wealthy Emiratees.
“They have been here for decades with respect to horse racing and stud properties. That is now expanding to include other commercial and residential developments.”
Call for new regional centres
Mr Alexander-Hatziplis adds, “There is also the opportunity for these significant and substantial investors to develop whole new regional centres, just as they have done in their home countries.
“Besides pushing for affordable housing in our existing cities, we should also be looking at developing whole new centres. Australia needs to develop more cities in regional areas to reduce the pressures on existing major metropolises and to enable more Australians to get into their own home.
“New regional cities could help provide more affordable housing, reduced commuting times and improved quality of life. Each new city needs to be centred around a specialist employment offering,” he says. “For example, the development of Western Sydney International Airport is attracting a range of businesses that will create an employment hub that will in turn lead to residential developments nearby. This can be replicated elsewhere.”
Bilateral flow
Besides increased investor interest from UAE and other Middle Eastern investors in Australia, there are also more Australian architects working on projects in the Emirates, notes Mr Alexander-Hatziplis.
Abu Dhabi and Dubai are some of the most well-known cities for dynamic architectural style, such as the Burj Khalifa, Burj Al Arab and New Louvre, he notes.
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