AUSTRALIA’S spring-selling’ real estate season is seeing a defiant return of Chinese buyers, undaunted by lending restrictions aimed at curbing their interest in the country’s sky-rocketing housing market.

    Financiers and estate agents say Asian investors have found new avenues to re-enter the market, including targeting cheaper homes and settling in cash. Others are turning to groups of wealthy individuals or foreign-owned banks for loans, after Australian banks turned off funding to overseas buyers this year.

    The renewed buying frenzy has re-ignited speculation that prices in one of the world’s most expensive property markets are in a bubble, alarming regulators.

    A Sydney apartment with Harbor Bridge views is now costlier than a similar home overlooking the Eiffel Tower or Miami Beach, research by property group Knight Frank shows.

    “We’re now seeing people from Shenzhen and even from mid-tier Chinese cities such as Chengdu coming into Australia and buying,” David Chatterjee, director of Melbourne-based Lucror Property told reporters. “Most of the house and land buyers that we see are cash buyers.”

    The Reserve Bank of Australia (RBA) has expressed concern that a booming apartment sector could be a key risk to financial stability with interest rates now at record lows.

    Australian banks tightened funding to foreigners earlier this year, citing higher credit risks, causing offshore demand to almost dry up.

    But Chinese buying inquiries have rebounded, up 34 percent in the September quarter for properties up to US$1 million compared with 12 percent in June, according to data from Juwai.com, China’s largest international property website.

    Australia’s foreign investment rules guide overseas investors to buy new properties, such as “off-the-plan” apartments that are yet to be constructed.

    Foreign-owned banks including United Overseas Bank and HSBC have stepped in to plug the gap left by the big banks, regulatory filings show.

    Non-bank lenders are also eyeing the market, with consultancy Basis Point saying it has received numerous enquiries from non-bank lenders as well as borrowers.

    Wealthy individuals are pooling together money to invest in Australian homes. Sydney-based corporate adviser Challis Capital this month branched into property investment after winning a A$100 million (US$74 million) mandate from a consortium of Asian private investors.

    Non-bank lender Pepper Group this year sealed the biggest funding deal the sector has seen in a decade when it launched a A$700 million offer of residential mortgage-backed securities.

    In Shanghai, a senior executive at a family office told Reuters he was recently approached by three investment managers, asking him to invest into funds lending to Chinese homebuyers in Australia. He could not be identified due to client confidentiality.

    In a world of ultra-low returns, such investments can earn up to 15 percent, according to several investors.

    A weakening currency is also driving Chinese investors into offshore investments, said Long Yihao, a director of Chinese-owned Longshi Group which has three developments in Sydney.

    “Because Australian banks now have stricter lending requirements, Chinese buyers would seek loans from domestic branches of Chinese banks, and also Chinese private institutions, which charge a much higher interest rate,” Long said.(SD-Agencies)