Updated: Aug 20, 2020
On 8 Feb, 2020, Domain heralded “Coronavirus leaves Sydney’s prestige market sick”, stating “The Lunar New Year is typically the busiest time of year for visitors from China, and agents on both sides of Sydney Harbour have long made the most of the annual holiday by timing the launch of their high-end listings accordingly.”
Most Chinese buyers are local
It’s worth bearing in mind, the absolute majority of Chinese families looking to buy Sydney property are residents who ... are using Australian assets and income to finance the purchase.
However, this isn’t supported in evidence. Since January 2017:
Lower North Shore Sales above $5m: approx. 475
Chinese New Year celebrations since Jan 2017: 2017; 2018; 2019 for which we have ownership data
LNS Sales since 2017 >$5m to people with Chinese surnames, which occurred during CNY celebrations: 1 (seriously… only 1)
So, whilst there may be anecdotes about prestige property sales to Chinese buyers during CNY, it is VERY limited.
Which begs the question, was Coronavirus impacting Sydney property sales in January and early February 2020?
North Shore Auction Clearance rates (weekly results): are 90-95%, which is as good as it gets
Price-levels achieved vs expectations:
- General: Sydney Median prices are at record highs
- Specific: (anecdotally) Most properties selling above the Reserve Price
LNS Buyer Profile (eg Chinese as a % of all buyer inspections): Consistent with 2nd half of 2019 * (Based upon survey of Belle Property LNS agents)
Isn't supported in evidence
So, whilst there may be anecdotes about prestige property sales to Chinese buyers during CNY, it is rare.
It’s worth bearing in mind, the absolute majority of Chinese families looking to buy Sydney property are: Permanent (or Temporary) residents; who mostly live and work in Australia; and who are using Australian assets and income to finance the purchase. Of course, some of these buyers have ongoing ties to China / HK / etc, however, given ongoing government restrictions upon withdrawing capital from China, it is rare to find buyers shopping across the majority of price points on the Lower North Shore who are entirely reliant on China assets / income to fund a purchase.
In summary, we believe that in the lead-up to Chinese NY, the impact of Coronavirus on Chinese appetite for prestige Sydney property was modest, and significantly less than (say) the 2015 Shanghai Share market correction; or announcement of capital restrictions on Chinese Nationals.