Australia’s international buyer market has gone into hiatus as reports emerge that some overseas buyers are refusing to purchase anything without getting into the country to see a property in person first.
Despite an increase in inquiries from overseas buyers keen to capitalise on Australia’s cheap dollar and to secure property in a country that has handled the coronavirus pandemic admirably, agents say it is the site unseen factor that is holding buyers back, www.domain.com.au reports.
And with international travel restrictions in place due to the coronavirus crisis, it could be up to 18 months before the market returns to anywhere near full activity.
Fletchers Real Estate Canterbury director and auctioneer Tim Heavyside said the local market was on hold.
“Numbers across the board are right down, including international buyers,” Heavyside told Domain. “There’s a hindrance on sales as buyers from overseas aren’t able to see properties.”
Sydney’s market was experiencing similar low numbers of buyers from overseas in the current market.
Christies International Real Estate director Ken Jacobs said international buyers wanted to inspect before buying.
“It’s true there has been strong inquiry but travel restrictions are stopping people from being able to inspect properties so they’re not buying because of that.”
“We’re treading water at the moment, just treading water,” Sydney Sotheby’s International managing director Michael Pallier added. “In general, inquiries are up, but transactions are down.”
Homes that were selling to international buyers were ones that either they had seen before Australia’s borders had closed, or ones that friends and family had inspected, he said.
Heavyside said the few who were buying, or even selling, were doing so for a specific purpose like being closer to family.
Some were sending friends or relatives to inspect homes privately. One recent buyer had purchased after seeing the property via FaceTime.
“I sold a property at 66 Belmore Road, Balwyn, for a vendor who was stuck in China. I sold it while they weren’t there [for $2.35m],” Heavyside said.
For those who had already bought, there were issues with being unable to get into the country.
One buyer who purchased in Dover Heights that settled this week was unable to get into the country to collect the keys.
Ray White Surfers Paradise chief executive Andrew Bell said it was a similar story for international buyer numbers looking at the Gold Coast.
“I say we’re in a void at the moment,” Bell said. “Early last year we would have Chinese buyers come into our office daily and buy one or two apartments, that’s totally stopped now.”
Low international buyer numbers were not only due to the coronavirus pandemic, but also tougher Foreign Investment Review Board regulations, higher stamp duty for foreign buyers and a clampdown from the Chinese government on buyers taking money out of the country, he said.
Executive chairman of international property listing portal Juwai Georg Chmiel said while transactions were difficult in the current market, a surge in buyers was expected once travel restrictions were lifted.
“We still have strong demand from Chinese buyers for Australian property, but getting them to the transaction is harder than normal at the moment,” Chmiel said.
Australia’s management of the coronavirus pandemic made it a more appealing place to buy, particularly Melbourne, Sydney and Brisbane which were the most popular cities for international buyers, he said.
“Australia was already near the top of the list for buyers from China, Singapore and Malaysia,” Chmiel said. “Each of these countries has been challenged in its own way by the coronavirus pandemic, in ways that make Australia even more appealing.”
Agents agreed with Sotheby’s International Pallier, saying once restrictions were lifted, the market would take off again.
“We just have to be patient and get through it,” Pallier said.
Source: punchng.
