Chinese property investment in off-plan developments across Australia has been a popular venture for some time, but it could reportedly soon be opened up to even more people in the nation, after one company apparently announced its intention to make funding easier to access.
According to The Australian Financial Review, Ping An, a Chinese insurance company with a banking division, placed numerous signs around a conference it was hosting in Shanghai last week which promoted a no-deposit loan for off-plan properties.
Should the offer actually come to fruition, it would make it easier for millions of people in China who potentially could afford repayments but not an initial deposit to get themselves a slice of the Australian property pie.
The company, along with property marketing firm Austpac, is reported to be looking for investors to come on board at the West Brunswick and Hope Island areas of Melbourne and the Gold Coast respectively, where there are many off-plan developments in the planning.
Under the scheme, Ping An would be paying the initial ten per cent deposit on the cost of the property being invested in. The buyer themselves would then have two years from that date to pay back the ten per cent deposit.
At this point when they've paid back the initial down payment, Ping An would extend about 30 per cent of the property’s value to the investor, who would then have to find an Australian bank to loan them the remaining 70 per cent.
“It will open up the Australian property market to a whole new class of investors,” Eddie Yuen, the Shanghai-based manager of Austpac told the AFR. “Investors may not have the cash now, but they can still buy a property in Australia.”
However, while it seems like Chinese buyers are going to be getting a sweet deal, those who cannot pay the deposit will be paying the price for these mortgages, as the interest rate will come in at around 14 per cent.