The Top 3 Misconceptions About Chinese Buyers Explained

By Michael Yang,?GiFang.com

Recently, discussions with various agents revealed common questions about the Chinese property market, particularly about the concept of 'cash buyers.' As we begin a new financial year, it's essential to address the top three misconceptions about Chinese buyers.

Misconception #1: The majority of Chinese buyers pay cash.

It is widely believed that Chinese purchasers pay for their Australian real estate acquisitions in cash, with little need for borrowing. However, a recent survey of over 300 buyers found that more than 90% of Chinese buyers in Australia use a mortgage. Buyers in China frequently utilize more cash due to stringent lending practices, whereas Australians embrace the concept of investing using "OPM" (other people's money). This strategy enables them to own or control property with minimal financial investment.??

Chinese banks typically finance up to 70% for a first property and 30% for a second, with no financial leverage for third-party acquisitions. As a result, Chinese purchasers tend to utilize more cash. In contrast, GiFang's continual education and online resources have helped Chinese purchasers comprehend the advantages of financial leverage in the Australian market.??

Misconception 2: Chinese investors buy on the spot.

The idea that Chinese purchasers make on-the-spot purchases with suitcases of cash is greatly overstated. In practice, international purchasers frequently have friends or family members in Australia survey houses on their behalf. They often look about 30-40 properties before making a decision. Even with off-the-plan properties, purchasers want to come and explore the location.

GiFang provides a 'buyer advising' service, which helps Chinese purchasers with property analysis, math crunching, and transaction facilitation. According to our poll, just 3.9% of potential buyers make a purchasing decision within 10 days, while more than 51% spend at least 60 days conducting thorough research. Patience is essential for creating trust with Chinese clientele and maintaining long-term partnerships.

Misconception #3: Chinese buyers will pay over the market price.

This is arguably the most common misperception. Foreign purchasers frequently lack knowledge of local market pricing and bargaining strategies. Chinese purchasers commonly compare Australian house prices in terms of 'price per square metre,' a strategy common in China, where property prices are generally higher.??

Despite sellers' anticipation of higher sale prices when targeting Chinese buyers, appropriate market pricing is critical for repeat sales. GiFang's material strives to educate buyers and ensure they feel valued, rather than 'ripped off.'??

Conclusion

Understanding these myths allows agents to better serve the Chinese buyer market. GiFang.com provides premium listings to test the Chinese market, starting at $599 for residential and $699 for commercial properties, with no contracts required. Monthly subscriptions with unlimited uploads start at $399. Agents receive fast inquiries with no commission fees. We also provide training sessions for sales teams to improve their capacity to serve this market.

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Author: Michael Yang, CEO of?GiFang.com, can be reached via?[email protected]