In recent times real estate prices in Sydney and Melbourne have been noticeably high – especially considering Australia’s current low interest rates. One factor contributing to these elevated prices is the increase of Chinese real estate investors who have been focusing their attention on buying investments in both cities. Until now.

According to a recent study Demystifying Chinese Investment in Australia by KPMG Australia, the University of Sydney Business School and China Studies Centre, analysis showed that real estate investors from China have begun switching their focus to smaller Australian cities - this includes Brisbane.

“Chinese high net worth investors and developers are looking to new destinations offering discounts on prime property such as Miami in the US, and in Australia, Brisbane, Gold Coast, Adelaide and regional suburbs of NSW and Victoria will start to gain more traction,” the report says.

Chinese developers are drawn to Australia for numerous reasons including our quality of life, good weather, clean air and world-class education institutions – just to name a few. While there is an obvious increase in interest, Australia has always been a favourite destination for Chinese investors looking for a stable investment that offers greater returns and lower funding costs.

What areas are these investors outlaying their money? During 2014, as illustrated in the report, Chinese direct investment in Australia was predominantly focused on commercial real estate (46%, up from 14% in 2013). In fact, Chinese investment volume in commercial real estate nearly quadrupled to $4.37 billion over the 12 months.

While the commercial sector is being largely effected, a snapshot of HS Brisbane Property sales in the last 6 months have indicated that the main portion of domestic real estate buyers in the Brisbane CBD are typically more skewed towards local investors – making up a massive 38% of sales. This figure is closely followed by local owner-occupiers who purchased 33% of CBD units, Sydney investors making up 13%, Melbourne investors totalling 11% and Chinese investors making up only 5%.

However, according to the report, other areas that saw an increase thanks to Chinese direct investment were infrastructure (21%) and for the first time, material investment in the tourism and leisure sectors (12%). So while our CBD property remains a local investors market at present, evidence points towards Chinese investors looking to invest in commercial real estate, infrastructure, tourism and leisure sectors of smaller Australia cities, just like ours.

What does this mean for Brisbane real estate? Put simply, it means we can expect to see a strong injection of growth into our local CBD economy in the near future. This in turn will help boost the Brisbane real estate market and help our state to experience positive growth. If you are looking at potentially increasing your investment portfolio in the future it is worth having a chat to CBD Property experts now to ‘get in at the right time’.

For more information contact Hannah Schuhmann, Principal of HS Brisbane Property on 0419 782 133 – because understanding Brisbane’s local CBD market is what HSBP does best.