Australia growing as emigration destination

Buyers from the Chinese mainland acquire Australian property for the education of their children and a better environment

Ausin Group (Finance) Pty, which offers property and mortgage broking in Australia to Chinese buyers, expects to sell two-thirds more homes and to double the amount of loans it arranges as demand

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The company forecasts A$1.5 billion ($1.4 billion) in sales of new residential properties in the year ending June 30, compared with A$900 million over the previous 12 months, Sydney-based Managing Director Joseph Zaja said in an interview on Tuesday. The value of mortgages the closely held company arranges through Australian banks is expected to climb to A$500 million in the 2015 calendar year, he said.

Ausin is benefiting from surging demand from China, where the housing market is faltering. Chinese purchasers overtook Americans to become the biggest buyers of real estate in Australia in the 12 months through June 2013, plowing A$5.9 billion into commercial and residential property, up 42 percent from the previous 12 months.

"I don't see the trend slowing down," Zaja said. "It's here to stay."

Real estate is the biggest short-term risk to the Chinese economy, Markus Rodlauer, mission chief for China at the International Monetary Fund, said last week. Authorities are trying to avert a collapse of the real estate market after data showed housing prices fell in 55 of 70 cities in June from May, the most since January 2011 when the government changed the way it compiles the statistics.

The Chinese buy in Australia to educate their children and to live in a clean environment, CLSA Asia-Pacific Markets economist Andrew Johnston wrote in a report on Wednesday. Mitigating economic risk is also a higher priority for Chinese investors than returns, he said.

Ausin sources projects from local developers, including Stockland and Mirvac Group, marketing them in China where it has 11 offices and 280 staff, Zaja said. The average price of the properties Chinese buy in Australia is A$630,000, according to the company.

Developers including Lend Lease Group, Mirvac and Goodman Group will benefit from the surge in apartment projects resulting from the demand, according to CLSA.

When Zaja and a partner based on the Chinese mainland, whom he declined to identify, set up Ausin in 2009, banks would only finance developments where less than 30 percent was sold to overseas buyers, he said.

"Now, that's up to 100 percent in some cases," he said. "The larger banks had the view that overseas buyers were a much higher risk than local buyers. But we've been able to provide them with statistics that less than 1.5 percent of all our purchasers cannot complete their purchases."

Ausin last year began operating as a mortgage broker and now arranges home loans through local banks for about 93 percent of its buyers, Zaja said. The average borrowing is 70 percent of a property's value, or about A$440,000, according to Ausin.