By Alexandra Ridout
The Chinese are on the move, and it’s in typical Chinese fashion – fast, cash-fuelled and in mass.
Australia – a number 1 location
This ‘great migration’ is a fast growing trend. It’s led by the middle-classes and the wealthiest Chinese, who currently account for 47% of Chinese emigration. Research carried out by Hong Kong-based brokerage firm CLSA found that the main reasons Chinese are emigrating is in hope of a country with clean air, a good education system and a strong legal system. As a desired location, Australia ranks number 1.
1 million+ by Chinese ancestry and growing
Australia is currently home to 1 million+ Chinese by ancestry, a pool that is constantly growing. On average, approximately 420,000 Chinese international students flock to Australia. 2013 alone saw 676,000 Chinese tourists arrive at our shores. Each year, there are around 30,000+ 457 visas issued to the Chinese. Lastly, between 2006 – 2013, 195,206 Chinese migrants were granted permanent residency in Australia.
Australia is welcoming these trends. On top of the 457 visa, a new visa has been introduced: the “subclass 188” and “subclass 888”. As the number 8 represents luck and prosperity in Chinese culture, the visa’s main target is obvious. More than 91% of applicants so far have been Chinese, according to figures from the Australian Department of Immigration and Border Protection.
$27 billion contribution to the property market in the past 7 years
So what are they planning to do here? In a nut shell, consume. It is this consumption that is already making, and will continue to make, a huge impact on the Australian economy.
Picture this – it’s Saturday morning and you’re off to battle it out at auction for that house you’ve been drooling over. You eye off your competition… several young couples, university students and their parents, a few suits and a mix of well-heeled and normal looking men/women. And over 70% of them are Chinese.
This is not an unusual scene in today’s Australian property market: As CEO of McGrath property, John McGrath told the ABC “In some suburbs 90% of new product will sell to Chinese buyers.” To further paint the picture, he said 2013 saw an estimated 18% of Sydney and Melbourne off-the-plan sales go to Chinese buyers.
It is this typical Saturday morning that is fuelling Australia’s housing boom. According to CLSA report, Chinese purchasers overtook US to become the biggest buyers of real estate in Australia in the 12 months through June 2013, ploughing $5.9 billion into commercial and residential property, a 42% increase from the previous 12 months.
Love for luxury goods, technology and more
Other common scenarios – a 10 metre line to get into Hermes or the likes, all Chinese; Elegant Asian women enjoying a decadent afternoon tea at a coveted Sydney eatery, loaded with luxury shopping bags at their designer heels. And then the sales – the Boxing Day sales rush is typically a Chinese affair. This should come as no surprise!
Globally, ‘Chinese are the biggest buyers of luxury goods, making 29% of all purchases,’ according to consultants Bain & Company, all of which are increasingly being made abroad. The long and patient queue of Chinese potential customers waiting through the night for the latest Apple iPhone release at the Apple Store on George St. Sydney is a testament to the ever-growing appetite for technology.
The new money and investment will bring fresh opportunities for construction, tourism and other related industries. This is a blaring signal to all Australian businesses and the outflow has only just begun!
Australia: be prepared to reap the benefits
The Hong Kong-based brokerage firm CLSA forecasts that departures from China will double to 200 million by 2020. Australia needs to be prepared if it wants to reap the benefits.
“Visible minorities now make up 27% of Australia.” This is where Australia is heading and it’s only the beginning.