Hong Kong investors are showing strong interest in the Australian market – partly because they can borrow money at 2 per cent.
Alphonsus Lau, senior vice-president at Chinese real estate agency Premier Capital, said he runs fortnightly Australian investment seminars in Hong Kong that regularly attract 50 visitors.
He told The Adviser that investors like Australia because they can borrow money in Hong Kong dollars through Australian banks based in Hong Kong, such as Westpac, Commonwealth Bank, NAB and ANZ.
The typical Hong Kong borrowing rate is about 2 per cent, compared with an Australian return rate of about 5 per cent, he added.
Mr Lau said another reason Australia is popular is that property prices have been increasing more rapidly than in Hong Kong – yet they are still much cheaper.
“The average price in Hong Kong is twice as expensive as Sydney properties. That makes Sydney property look a lot cheaper to Hong Kong investors,” he said.
Mr Lau said he tries to visit Australia every six months so he can properly understand the local market. He last visited in January and expects to return in April.
His richer clients have a strong preference for Sydney, while other investors will target Sydney, Melbourne, Brisbane and Adelaide in that order, Mr Lau said.
Their purchases typically range from $550,000 to $1 million, he added.
Mr Lau told The Adviser that he deals with three types of buyers: investors, people who used to live in Australia, and parents who are purchasing on behalf of their student children.
He works with Australian Mortgage Brokers and other local brokers when his clients want to borrow money through Australia-based lenders.