Look what Chinese investors are buying now

We all know that Chinese investors having been underpinning the off the plan inner city high rise apartment market but now they’re been sold a different type of under performing property.

Melbourne developers are selling unsuspecting Chinese investors house and land packages in the outer suburbs, Nigel Satterley has warned.

According to BRW richlister and property developer Nigel Satterley between 4,000 and 5,000 lots – about 20 per cent of the market – were being sold into the Chinese market every year.

Slattery told The Australian Financial Review:

“Developers are over-selling house and land packages into China. Some of these deals will not proceed because of tighter bank funding to overseas buyers,”

While the major banks’ pull-back from lending to the apartment market has been widely reported Mr Satterley said funding was also drying up in the land market and many purchasers are running into funding trouble.

“Ninety per cent of Chinese buyers want funding from a local bank,” he said. 

At Metropole we have always steered clear of buying house and land packages in the outer suburbs.

While these may be great locations to bring up your family, these properties are not what we call “investment grade.”

We’ve always suggested to avoid the outer suburbs which tend to be more dominated by young families, warning that these are not good investment locations because of lack of scarcity and the demographics in the area – young families who are struggling to make ends meet.

Now this is not a  judge of people – it’s just a fact that most families in these areas are more interest-rate sensitive and petrol price sensitive and this means values in the outer suburbs are less likely to increase as much as the inner and middle ring suburbs where there is better infrastructure, amenities and disposable income.