Asian real estate investors are venturing beyond regional markets to OECD countries and other areas in the West, according to a recent study by Colliers International.
Outbound real estate investment from Asia has climbed from $1 billion in the early 2000’s to more than $30 billion in 2013. This is a result of a surge in global liquidity, as well as several other “pull” and “push” factors, according to CEO, Asia at Colliers International Piers Brunner.
Pull factors include the higher yields available in foreign markets, as well as strong economic growth potential and first world country real estate environments. Meanwhile, governments in Mainland China, Hong Kong and Singapore are pushing investors in an effort to slow local real estate markets by loosening overseas investment restrictions.
According to John Marasco, Colliers International’s Managing Director of Capital Markets and Investment Services in Australia, the Chinese investors are contributing greatly to the Australian real estate market.
“Chinese buyers alone are currently spending around $5.9 billion a year on Australian property (both residential and commercial),” he said. “The strong performance of Australia’s property markets suggest this demand will continue to grow across a range of assets.”
Director of Capital Markets and Investment Services, Asia, Terence Tang added: “We believe the emerging trend will see more outbound investors taking on additional risks in non-traditional property sectors, such as hotels, and to commit to value-adding schemes, including conversion and development opportunities, in the secondary locations of gateway cities, where prices are more attractive than in traditional core locations.”