Chinese eye WA property

Kate Emery

Chinese investors are eyeing off Perth's housing market in a move experts say could underpin higher prices.

Concerns the east coast market is overheated, a Chinese Government corruption crackdown and growing numbers of Chinese studying in WA are tipped to fuel a surge of investment in Perth's residential property market.

Such a move would likely drive house prices higher but opinions vary on how significantly. Foreign investment in WA property more than trebled in the three years to 2012-13 on Foreign Investment Review Board figures, which only reflect approvals.

Anecdotally, real estate agents have reported growing Chinese interest in Perth in the past year.

Foreign investment policy mostly restricts foreign investors to new dwellings to boost stock.

Mark Hay Realty Group's Mark Hay said Chinese investment would grow as cautious investors left the "overheated" east coast.

"The level of investment in the WA housing market will increase dramatically," he said.

"I know of a couple of Chinese individuals and companies who are looking at selling up to 50 per cent of the development to their Chinese interests offshore."

Jones Lang LaSalle global capital markets research director David Green-Morgan said Sydney and Melbourne historically received the bulk of Chinese investment but as options dried up, Perth and elsewhere would be increasingly targeted. "You would certainly expect that to have some effect on prices," he said.

Junwai.com chief executive Andrew Taylor, whose website caters to Chinese buying overseas property, said a shared time zone, a strong China-WA relationship and price growth potential made Perth attractive.

MLG Realty chief executive Marcus Gilmore said Chinese investment in Perth could rival Melbourne and Sydney, where it made up to 20 per cent of new supply. Drivers included the growth in Chinese student numbers.

In WA, FIRB approvals for overseas investment rose from 368 in 2009-10 to 1267 in 2012-13.

Nationally, approved investment for the first nine months of 2013-14 was up sharply to nearly $25 billion - a trend Lombard Street Research analyst Freya Beamish warned could create a "real estate bubble".