The Effect Of Asian Money On Australian Property Development

House development in Australia is changing!

If you we hadn’t noticed that there is also an online flood of Asian money entering Australia then you need to start out talking to people in the industry before you get yourself into a spot of bother. Builders cardiff

Asian money is changing the eye of property development in this country through its sheer quantity and through the Asian kitchenware developer’s very different way of thinking to the way that property development has recently been undertaken in Australia up until now.

The apartment market appears to be the Asian property developer’s preferred target. It is my understanding that small Asian investors are seeking returns greater than about 2%, which is what their home market provides, and is what the Australian market exceeds (by say double). This makes the sale of house “easy” in Asian countries. 

Also I understand that owning two investment properties in China can have substantial taxation implications. Now i’m not an expert on China taxation; I’m just repeating something I was told by an Hard anodized cookware developer.

This means that there is no “issue” with undertaking large range developments without staging as they are certain with their sales. This can also cause an abundance of apartments in the local market if sales are required in Down under.

One Asian developer I actually know told me they presell the apartments and get the full deal value at that time to fund their development. There goes the Foreign property development finance sector! Bank finance providers should think very carefully how they changes their business practices to avoid being demoted to providing small scale development finance that the Asian property creator isn’t interested in.

In numerous discussions with my network I hear people admit Australia is a “safe haven” for Asian money. If this were the truth then it would make clear why Asian property builders may pay an above selling price for a potential development site or pay for a site in advance rather than acquiring a site with an Alternative Agreement.

Again it has a massive impact on Australia’s traditional development process of “controlling” a website before having to pay for it. Because of this an Foreign developer needs to compete in a market where site costs more, are purchased outright rather than controlled, and where competitor doesn’t need to jump through a financier’s hoops.

Let’s sum up these main issues:

a) Residential apartment investments in Australia have returns about double of that which small Asian investors can acquire at home;

b) Taxation issues in some Asian countries might create Australian investments more great;

c) Large scale innovations can be undertaken without staging potentially “flooding” the apartment market;

d) Pre-sales of apartments in South america can bring about the full value of the property sold being released to the developer to take on the project removing the requirement to deal with a financier;

e) Potential development site prices are being forced up;

f) Australian property developers are competing against developers who don’t have the same constraints as they do.

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