With the instability of the domestic investment market, more and more Chinese investors are turning their attention to foreign countries and are desperately seeking investment platforms that can achieve a steady appreciation of wealth. According to the Foreign Investment Review Board, China has surpassed the United States as the largest source of foreign investment in Australian real estate. Credit Suisse Group recently forecast that Chinese investors will buy 20% of new housing in Australia by 2020, which is currently 15%.

Why is Australian real estate attractive to Chinese investors?

Professor Dong Fan, head of Beijing Normal University Real Estate Research Center and known as “the high-level national policy” and “godfather of real estate investment,” pointed out that Australia is his most favored overseas real estate investment market. After eight months of analysis and comparison of the investment prospects of nine overseas countries, he came to a conclusion:

Australia is impeccable

2. The United States, Hong Kong and Singapore have a general prospect;

3. Do not advocate vote Japan, South Korea, and Singapore real estate.

His reason is: the United States has real estate tax and estate tax, investors want to pass on the assets of their children, to pay 30% -70% of the estate tax. Overseas investment loans only a small number of local banks and other loans, but the conditions are many; compared to the United States, the Canadian real estate investment benefits do not have a legacy tax, but the loan down payment; Hong Kong real estate is not suitable for investment, shocks, is not expected too Good; Singapore’s economic aggregate is small, the industrial structure is flawed; Japan has no resources, is still in the earthquake zone, and prices are not up; South Korea’s high growth point of real estate prices have ended; and Australia impeccable.

So, what are the differences between China and Australia in the real estate policy and market environment?

1. Market maturity China vs Australia

More than 20 years ago, the real estate industry in China officially entered the market. The new policies were introduced continuously, the macro-control was frequent and the market fluctuated greatly. Australia’s real estate industry has a history of more than a century and has maintained a steady growth trend. Housing prices have doubled in average every seven to ten years in nearly half a century, benefiting from the government’s effective control over the real estate market and the financial system.

2. Legal protection China vs Australia

Buy houses in China generally go to the real estate exchange, there is no professional lawyers involved. If investors do not understand the details of the contract, the future easy to fall into the trap and trouble. In Australia, buyers and sellers are required to hire a professional accountant or lawyer to handle legal matters. A professional advice and checks, to protect the interests and reduce risk.

3. Property Rights China vs Australia

Land Management Law provides that the use of residential land in China is 70 years. After 70 years, the land belongs to the state and the renewal fee is undecided. Australian real estate is a freehold property that can be passed on to future generations without a legacy tax.

4. 期房 loan China vs Australia

In China, when signing a contract, they usually pay 20% -50% down payment and purchase a second suite with a higher proportion of down payment. Pay the loan before the handover, you can only choose even with the interest rate also. In addition, there is no hedging account in China. It is very difficult for applicants who have applied for a loan to apply again. Australia signed a contract room, generally only 10% down payment, submitted after the repayment until the loan can be up to about 80% of the loan, you can choose the same principal and interest or only interest. You can also open hedge accounts, put the extra funds in hand inside, in order to hedge the principal, offset the interest. In addition, once again apply for a loan in Australia is not difficult, you can also refinancing and other real estate value-added after the value-added part of the cash for new investments.

5. New House delivered to China vs Australia

When submitting a house in China, most of them are rough houses, and the floor surface of the wall only serves as the basic treatment. After the submission of the house, the owner needs to make their own decoration. In Australia, new homes are finely furnished and ready to be rented.

6. The risk of residential buildings China vs Australia

In China, the down payment to developers, there is no regulation. If the developer shortage of funds appear flats, will make investors suffer losses, investment risk. In Australia, the first payment is deposited in a government-regulated trust account, and the developer is not entitled to use it before handing over.

7. Negative withholding tax China vs Australia

China does not have a negative tax deduction policy. In Australia, the current rental income less than interest on loans, home depreciation and other expenses, the government allows investors to declare losses, offset other income. Negative tax deduction policy is a unique Australian policy is that when you invest in a real estate, you can make a depreciation of the property, annual depreciation loss of money can offset the year’s income, you can apply for a refund! Can be said that this policy is the Australian government to encourage investment in real estate as a weapon.

8. Lease Management China vs Australia

In China, the housing rental management system has not yet reached the scale, specialization and standardization, the legislative work lags behind, and the rental management company lacks follow-up services. Australia’s leasing industry is relatively formal, rental management companies can provide investors with a range of services, including the publication of rental ads, screening tenants, property management, rent, payment fees.

9. Rental Return China vs Australia

The report shows that in the first half of this year, the average rent rate of return of ordinary residential quarters in China’s 17 large and medium-sized cities was 2.6%. Rent returns in Shanghai and Beijing were 1.9% and 1.8% respectively. Rates of return on rentals in Australian cities such as Sydney and Melbourne are generally between 4% and 6%.

10. Vacancy rate China vs Australia

The report on the vacancy rate of urban housing in China in 2014 shows that the vacancy rate of the urban housing market in the country has reached 22.4% and the vacancy rates of Shanghai and Beijing are 18.5% and 19.5% respectively. According to the January statistics from Domain Group, a real estate information website in Australia, the vacancy rates of all major capital cities in Australia are below 3%. According to common international practice, the vacancy rate between 5% and 10% is a reasonable range, indicating that the balance between supply and demand of commercial housing is conducive to the healthy development of the national economy; vacancy rates between 10% and 20% are vacant and it is necessary to take Certain measures to ensure the normal development of the real estate market and the normal operation of the national economy; vacancy rate of 20% or more for the serious backlog of commercial housing.

Australia’s liquidation rate this week

This week Sydney clearance rate of 77%, the number of transactions 880 sets; this week, Melbourne liquidation rate of 80%, the number of transactions 1120 sets. Such a high liquidation rate once again proved Australia’s hot real estate market and a lot of demand.

Xiaobian point of view:

Compared with China, the Australian real estate market is more mature and standardized, credit system and lease management system is relatively sound and perfect. Australian real estate for the permanent property rights, there is no inheritance tax, low investment threshold, repayment pressure is small. No risk of residential building 期房, delivery immediately after the rental, you can also enjoy the negative tax deduction. High rental return and low vacancy rate are suitable for long-term investment.

As an investor, risk is also a very important reference indicator irrespective of which area is invested. Many of the high-yielding wealth management products on the market eventually proved cheating. Australian real estate is an ideal investment that perfectly balances high returns and safety. This is why real estate in Australia is becoming more and more preferred by investors.