Asian buyers seek sanctuary in sydney apartments

An increasing number of Asian buyers are seeking sanctuary in Sydney apartments, according to new research. House prices have stabilised in the Australian capital, according to Knight Frank, but demand for new build apartments remains robust, with local Asian investors accounting for 50 per cent of activity.

"Asian investors continue to view Sydney as a safe haven that is well supported by a strong rental market," explains Matt Whitby, Knight Frank's head of Research and Consulting for Australia.

"The bulk of enquiry is concentrated in the AUD$450,000 to AUD$650,000 range for first home buyers and AUD$650,000 to AUD$850,000 for upgraders," says Whitby. "Demand for new apartments has been steady in line with the generally cautious mood amongst households, albeit with some inconsistencies between locations and product type."

At the lower end of this scale, first home buyers are particularly quick to absorb any sub AUD$550,000 product, especially given the government initiatives targeting new apartments at the affordable end of the market. Specifically, this has included increasing the grant for new dwellings to $15,000 in addition to some transfer duty concessions.

The improved affordability following the moderation in median dwelling prices, lower interest rates and higher rents will also encourage some renters into ownership.

Overseas demand is also set to be boosted by Hong Kong's recent introduction of 15 per cent stamp duty tax on international purchases, predicts Knight Frank, with the levy driving buyers from China, Singapore, Malaysia, Indonesia and India Down Under. FIRB laws also mean that offshore Asian buyers in an investment capacity are excluded from the established market, therefore directing demand to new product.