Elite AgentSELLING + MARKETING PROPERTY

How to Avoid Missing Out on the China Opportunity

ANDREW TAYLOR, CO-CEO of Juwai.com, discusses the advantages of embracing the Chinese market.

WHY HAVE Australia’s four largest real estate networks all signed exclusive agreements to market their listings in China?

It’s because the knowledge is finally sinking in that Chinese buyers have become a permanent part of the Australian real estate market. Whether they are here to invest, immigrate, study or work, Chinese buyers are the new reality.

Ray White Chairman Brian White summed it up perfectly when he said, “This is the ‘Asia Century’. On a practical level, Ray White agents are able to express to potential vendors that by appointing Ray White their property will receive excellent exposure to the lucrative Chinese market.”

Australia ranks high among the countries where Chinese prefer to buy property, second only to the US. Australia even ranks higher than the UK (which is third).

Overall there are about 63 million Chinese who – due to their finances – can be classified as possible buyers of international property. Meanwhile more people are joining this group every day, as the Chinese economy just keeps growing. Today it is twice the size it was just seven years ago.

Income per person is also set to double, in this case by 2020. Think about what that means. In less than six full years, the average Chinese person will have twice the money they now have. If they allocate roughly the same proportion of their income to international real estate, how do you think that will affect their demand for Australian property?

It’s not just about the money. It’s also culture. In fact, there are two elements of Chinese culture that favour international real estate investing.

First of all, the Chinese are big savers.

One young Chinese man who bought a property in New Zealand told the local television station that he saves 40 per cent of his income every month. In my experience, that is not an uncommon rate of savings.

As a result of putting so much money aside, the Chinese have more available to invest in real estate.

In addition to being world-record savers, the Chinese are on the whole big believers in property as an asset class. This faith in real estate is so powerful that, until a young Chinese man owns his own home, it is hard for him to find a desirable marriage partner.

This is a fact of life in a culture where owning your own home represents financial security much more than it does in Australia.

Besides Chinese culture, something else drives Chinese real estate investment. The country has appeared practically all at once on the world stage – as a large, wealthy and cosmopolitan nation.

Economic growth has been explosive since the country began opening in 1978. It has happened at a scale and speed that has never been seen before. That’s why it seems as if China has gone from poor to rich overnight.

If you want to work with Chinese buyers, my best advice is to consider it a long-term strategic move, not a one-off thing. As with any buyer group, it will take time to learn to understand these buyers and their needs.

Begin in the simplest way by advertising your property on a Chinese-language portal like ours. Experiment with various advertising upgrades to see what works best with your listings.

The next step can be intimidating, because it involves travelling to China. I can tell you from experience that you shouldn’t be put off. Agents who go to Shanghai or Beijing to exhibit in a property expo find the experience transformative.

Amit Miglani, CEO of MIG Real Estate in the Melbourne area, told us that he generated an estimated $18 million in sales at an expo we helped him attend. Besides learning a lot, he also made alliances with two Chinese agents. They now send him buyer leads when their contacts want to purchase overseas.

Agents ask me all the time if they need to learn to speak Chinese. The short answer is ‘No’.

Cultural and linguistic knowledge can’t hurt you. But a good agent will always do better with Chinese buyers than a bad agent who happens to speak Mandarin. This is especially true in the higher price brackets.

If you focus on your strengths, you should do well with this buyer group. And who knows? You may even pick up some Mandarin as you go.

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Andrew Taylor

Andrew Taylor is co-CEO of Juwai.com, the No. 1 international real estate portal for Chinese buyers. In the first half of 2014, his website sent buyer leads worth $3.3 billion to property marketers in Australia. Andrew has decades of experience managing real estate print and online media in both Australia and greater China.