By WILLIAM SHEN
The ongoing Hong Kong protests have influenced investors to look elsewhere for a stable investment environment. Data clearly indicates an increase in Hongkongers purchasing Australian property, not just residential but also commercial real estate. Interest in property has surged by around 50% since civil unrest over China’s extradition law sparked protests in June. Most of the commercial interest is in the Sydney CBD and surrounding suburbs.
Hong Kong investment growth in Sydney
The current situation is similar to the uncertainty caused when Great Britain returned Hong Kong to mainland China in 1997. At that time, there was a wave of Hongkongersrushing into Australia to buy properties, pushing up demand. Today, the uncertainty is causing a surge in the Sydney property market again. Since the demand is high, this is a good time to sell long-term hold investment properties.
A silver lining
As a commercial real estate agent in Sydney, I come across so many examples of the eagerness of Hong Kong investors to move their portfolio overseas. Recently, I received a call from a Hong Kong investor who wants to spend around $200 million for Australian properties in the Sydney CBD and another who flew into Sydney to inspect a property, made a deposit and flew back to Hong Kong in the same day. There are so many investors who have a large amount of capital looking for a safe place to invest. Sydney’s proximity to Asia and its stable social environment make it a prime investment destination.
With Chinese buyers, the story is different. The currency from China is hard to transfer overseas, with the Chinese government still controlling overseas currency transfers. Therefore, not many Chinese investors can buy Australian property. Hong Kong, even though it is technically a part of China, has some autonomy in the so called “one country two systems” arrangement. Hong Kong currency transfer is not controlled by the Chinese central government so, the residents can shift their savings freely overseas to places like Australia.
There is some truth in the saying: “One man’s loss is another man’s gain.” Although the civil unrest in Hong Kong is regrettable, the silver lining is that the influx of investment from Hong Kong to Australia may be a boon to the Australian economy.