Hundreds of people tuned in to watch RWC’s August Between the Lines Live webinar, where our panel of experts discussed the Asian investment market.
Ray White head of research Vanessa Rader hosted the webinar and was joined by RWC Western Sydney director of Asian investment services Victor Sheu, RWC Asian investment services agent Danny Shi, and Ray White Capital executive director David Mao.
While Mr Mao and the team at Ray White Capital are focused working with institutional and wholesale capital on credit and equity fund strategies, Mr Sheu and Mr Shi are focussed on providing a full-service offering to private investors including brokerage, leasing, and property management.
The experts discussed how, in the last two decades, the way Asian investors are spending their money in Australia has changed.
“In 2010-2016 we saw a wave of money coming into Australia, particularly Sydney and Melbourne,” Mr Shi said.
“They saw a boom in Asia and made a lot of money in residential development, so they looked to Australia to do the same thing here.
“Here they are looking for 1000 units, but those kinds of developments are really hard to find here. In Asia one project could be 5000 units.”
Mr Shi said in 2016 - 2018 the large projects were harder to deliver and the presales were getting slower.
“Then they started focusing on smaller boutique projects. Then it was covid and then we had a small boom in 2021.
“In the current market we still have a lot of interest looking for sites particularly in the upper and lower north shore and the eastern suburbs, but they now focus on small to medium size developments.”
Mr Mao said developers that are active are characterised by their ability to access funding.
“Developments are long-term but funding is typically short term in nature. The recent headlines from incoming investors have all been able to source long term stable funding from local or overseas financial institutions,” he said.
When you have long term stable funding, developers can weather the storm if there are delays in approvals, or construction, or pre-sales.
Mr Sheu said Asian investment into Australia continued to grow.
“We are seeing less people coming into the country but, if you look at the stats, Asian investment still represents over 15 per cent of investment into Australia. The amount of investment from these countries is continuing to grow.
“The Asian market is now a lot more educated and are very similar to our local investors as they have been through the boom and are familiar with all the processes.
“They are here to find a special vehicle to carry their wealth, it's more about wealth preservation now than bigger returns.”
Mr Mao said it was a good thing that Asian investors had become more educated about the Australian market.
“You want people to think about what yields, schemes and designs will actually sell. We don't want people to build for the sake of building,” he said.
“We wouldn't call it a slow down but more a self-correcting mechanism. We want people to slow down and think about their projects rather than building a product which no one really desires.
“Having that self correction where you're only producing products the market wants is a good thing.”
