Chinese buyers chase easier housing market

Auckland's biggest real estate agent, Barfoot & Thompson, said its offices had received a significant increase in inquiries from would-be buyers in China. Photo / Martin Sykes

Chinese nationals are moving into the New Zealand property market as Kiwis find the dream of owning their own home slipping away due to high prices.

Despite the Demographia International Housing Affordability survey released this week finding New Zealand to be one of the world's costliest places to buy a home, price does not seem to be a barrier for wealthy Chinese nationals who are being blocked from buying second or third homes in China.

Sixteen Chinese cities have introduced policies restricting the number of homes and properties a family can buy, and increased levels of down payments for home purchases with the aim of cooling China's heated property market. Beijing was the first to bar families from buying more than one home in May last year, and Shanghai followed in October.

This week, Chinese media reported the curbs will be extended to second and third-tier cities.

Auckland's biggest real estate agent, Barfoot & Thompson, said its offices had received a significant increase in inquiries from would-be buyers in China.

"There hasn't been an increase in the number of sales, but certainly the inquiries are starting to come in," said managing director Peter Thompson.

He said he could not say how many properties in the past six months were sold to Chinese nationals because the agency did not keep a record of the nationalities of buyers.

Education agent Roger Wu said he had received a lot more property inquiries from the parents of the students he brings in from China since the property restrictions were introduced last year.

"For the Chinese, owning houses, or several houses, mean greater prestige and higher status, which is important especially to the rich," said Mr Wu.

"The new rules in China means they are not able to buy houses for their children if they have already owned two houses, but they know it is possible to make their children homeowners in New Zealand."

Mr Wu said most were interested in properties between the $500,000 to $1 million range, but some would start with buying cheaper apartments and "upgrade" once their child got permanent residency.

Ming Tiang, director of Chiwi Immigration Services, says he has 10 potential investor migrant clients from China, willing to invest upwards of $1.5 million each to qualify for the investor migrant category, and most of them are keen to pump a large portion of the sum into real estate.

"They are businessmen, and are quite realistic about how much to invest in business here and what the returns would be," said Mr Tiang. "As with most Asians, the Chinese feel investing in real estate is usually a safer option."

According to Immigration New Zealand, there are 43 applicants from the Chinese mainland who are waiting to be granted approval or have received approval in principle to bring more than $1.5 million each into New Zealand.

A licensed immigration adviser, whose client is among the 43 Chinese, said his client had also asked him to search for a commercial property around the $2 million price range.

New Zealand is not the only country the Chinese are on the hunt for properties.

In the US, Real Capital Analytics said China-based companies last year invested over $63 million in the American real estate market and statistics from the US National Association of Realtors showed that investors from China are the most likely foreign investors to buy properties valued at US$1 million ($1.32 million) or more.