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Asian property investors set to buy real estate in safe Oz


asian investors, particularly from china, are setting their sights on property in australia as it has not been as severely hit by recession and is regarded as a safe place to invest.
richard butler, senior managing director of cb richard ellis international investments said there were lots of bids for a prominent building in sydney recently.
his firm has calculated that overseas investors accounted for 12% of total transactions in australia in the first half of this year, up from around 9% in 2008.
'what they are seeing is australia probably is a safer bet, where returns will be more secure and safe because of the transparency. whereas no one wants to go into markets that are decimated like singapore at the moment which is suffering from massive oversupply,' butler explained.
the fact that values have not been decimated in australia adds to the feeling of safeness. according to jones lang lasalle prices for commercial properties in sydney fell some 15% in the first quarter of 2009 from a year ago, but that is compared with a more than 30% drop in shanghai, hong kong, tokyo and mumbai.
it also says that rents fell around 25% in sydney while singapore, tokyo and mumbai saw more than a 30% drop in the first quarter.
recently in the commercial sector those investing include woori investment from south korea, and japanese builder sekisui which is to develop homes in sydney and brisbane. the chinese are active in the residential sector too. 'there is a fair bit of movement, with wealthy chinese having their children study in australia,' said john bongiorno, director for real estate agent marshall white based in victoria.
the company is considering opening an office in shanghai or beijing to attract more buyers. 'they are attracted by the safety of the country, by the high standard of education we offer, by the high standard of living we offer,' he said.
analysts said the timing may be good for foreign investors to enter the market as many local players are currently inactive due to tight credit. david green-morgan, asia pacific research director for dtz, said that he expects transactions to pick up as foreign investors are likely to rush and get the best deals.
'they are coming in at this point of the cycle as they see opportunities. they will be happy to hold for five to eight years and then they'll get out when the market gets back up,' he added.
source: http://www.propertywire.com/