27 Jul How to attract Chinese buyers – Barry Li
When it comes to foreign buyers, in the last 30 years, China has transformed itself into one of the world’s leaders in political, economic and social relations. With Australia a hotspot for Chinese immigrants, understanding the cultural nuances, both from an Australian and Chinese perspective, is more important than ever. In his book, The New Chinese, author Barry Li (pronounced Lee) gives us an insight into how Chinese buyers think, what is important to them and how they are reacting to the discussions we are having about their influence on the Aussie market. We talk to Barry about his findings.
Kevin: In the last 30 years, China has transformed itself into one of the world’s leaders in political, economic, and social relations. With Australia a hotspot for Chinese immigrants, understanding the cultural nuances – both from an Australian and Chinese perspective – is more important than ever.
In his book The New Chinese, author Barry Li has written an essential guide on the history, culture, and mindset of Chinese migrants in Australia. He joins me to talk about the book and the influences on Australia of having Chinese investors.
Barry, thank you very much for your time.
Barry: Thank you, Kevin, for having me. It’s a pleasure.
Kevin: That’s okay. Barry, how do Chinese buyers feel about how we discuss their buying Aussie property impacts on our prices?
Barry: Well, to answer that, Kevin, I need to divide the Chinese into two groups. One is the group who works here and lives here, permanent residents like myself. We make Australian salaries, so it’s as difficult for us to compete with overseas buyers as any Australian. We would feel the comment is unfair, but we totally understand why – because typical Australians can’t tell the difference.
For the second group, the Chinese from overseas, they don’t care about these comments. These comments won’t stop them from buying, because they don’t read our media or our social media.
They only look at things from Weibo and WeChat, which are largely controlled by property developers, and there’s probably only positive news about investing in Australia, which is the reason they buy here. So, that’s the situation.
Kevin: It’s a very interesting point you make, Barry, about when we look at buyers and we someone who’s obviously from Chinese descent, we naturally think that they’re foreign buyers when, in fact, as you just pointed out, a lot of them are in fact Australian citizens.
Barry: Yes. Let me tell you an interesting thing. When I bought my first property with my wife, we went to the inspection, and the thing I said to my wife is “Wow, I think I’m going to get this one, because there’s no other Chinese here.” I’m as worried of Chinese buyers as any Australians here.
Kevin: That’s a great story. Are you sensing that Chinese buyers are put off by regulations introduced to slow down Chinese investment? I think you already discussed that and said that you didn’t think that that’s impacting overseas buyers.
Barry: Yes. Personally, I believe the regulations already [2:26 inaudible] wouldn’t stop them, because to them, it’s still the same calculation that it’s better to buy property in Australia than in Beijing or Shanghai.
What’s really going to stop them is the enhanced foreign currency controls by Chinese government since the 1st of July. I think from the 1st of September, they are hyping it up that any transaction with UnionPay card – which is a Chinese payment card – over 1000 yuan will be reported to the central government’s bank.
They are trying to close every loophole to transfer money illegally from China to Australia, which would impact the settlement of properties bought earlier, as well. This has more use for controlling investment, rather than our regulations. That’s my personal opinion.
Kevin: That’s interesting that that impact might actually come from the other end, as opposed to from Australia.
What type of property is popular with Chinese buyers, Barry, and why?
Barry: Well, it depends. For example, if you are looking at a typical middle-class family from China, they are probably interested in a large family house. But Chinese have also been living in apartments and small units in large cities for the past 30 years, because having a standalone house is very much a luxury in China.
So, It depends on the family. It’s not common… Ten years ago, where you have a family of five or seven living in a two-bedroom unit in a city in Shanghai, so to them, a three-bedroom unit was a pretty good lifestyle for a lot of them.
And for the super-rich Chinese, it’s not about the property itself; it’s about the price. If they had a friend who bought a $1 billion mansion next to – I don’t know – the Opera House, then they will be thinking, “Okay, I probably should have something that’s more expensive,” to fit into the circle, if you know what I mean.
Kevin: Yes, I do. Interesting insight. How important is community – that is, other Chinese nationals – to their buying decisions, Barry?
Barry: It again varies. It depends on the age group and their background. For example, if we’re looking at older migrants who are not very good at speaking English, they will stay in the Chinese communities, like Eastwood or Hurstville or [4:37 inaudible], as well, to be very convenient. They don’t need to speak English to navigate around shopping and do everything.
But a younger generation, we don’t care much because we speak English. But we also look to the convenience of shopping and dining, so the places with a lot of Chinese restaurants and grocery shops would be a good choice.
But the most important decision is probably driven by education. You see lots of areas with good schools – good public schools or private schools – are priced up recently, because education is a very important thing for all Chinese migrants. For example, over time, these suburbs develop into Chinese suburbs, like Carlingford, where there is the best high school.
Kevin: You can probably answer this question for me quite well because you’ve had the experience on both sides, in Australia and in China. What are the big cultural differences between Chinese and Australian nationals?
Barry: Well, there are actually quite a lot of them, but if we focus on the topic of family and property, then I would say our traditional view of family is different. For example, when I had my children, their grandparents feel obligated to come here and help, although we tried to stop them. But we can’t, because if they don’t spend time and look after the grandchildren, they will be judged by their family and friends, which is very rare for traditional Australian families.
This will lead to a large-sized family. And we can’t send our parents to a retirement village, which is very bad in China, so they are probably going to be living with us or will have a unit very close to us. This is a different size, compared with Australian family traditionally, I believe.
Kevin: Yes, I’ve spoken to a number of real-estate agents who sell to Chinese, and they reflect that view that the size of the house is important, to allow many different generations to live there, but also the amount of land. It’s almost if you have a large portion of land, that’s almost a measure of your wealth, Barry.
Barry: That’s true. That’s true, because we don’t own land in China. All the land is owned by the government, and all the purchases are leasehold purchases. The fact that we can actually own land indefinitely in Australia is very attractive to Chinese buyers.
Kevin: Just in closing, Barry, what tips would you have about successfully preparing and marketing a property to appeal to Chinese buyers?
Barry: Certainly, I’m not an expert in this area; I can only speak from personal experience. I would say, for middle-class Chinese people, we prefer timber floors to carpets, because they’re more easy to clean than carpets. And we probably don’t have the desire for a swimming pool, because everyone knows they are hard and expensive to maintain.
We prefer south-facing rooms, as many as possible, because most of the older Chinese don’t like dryers for laundry; they like to sun dry or air dry. And big kitchen separate from the living room is better, because a lot of Chinese cooking is very smoky.
Also, importantly, the street number. If you have a property with the number 4 in the address, you need to consult a feng shui expert about how to convert that disadvantage into an advantage – for example, putting a Taiji or Buddha statue there at a certain angle would solve the problem of the misfortune brought to you by a number.
Unfortunately, a lot of Chinese are still very superstitious these days. But it’s a generalization. Please don’t quote me on that.
Kevin: No, I understand that. That number 4, is that the only number that’s unlucky for Chinese?
Barry: That’s the most obvious one, but I’m sure there are differences. Depending on which province you are from in China, they will have different superstitions or traditions there.
Kevin: Very good talking to you, Barry. I appreciate you giving me your time. Congratulations on your book, too. It’s called The New Chinese. It’s available now, and it’s quite a good read if you want to get to understand the Chinese culture.
Barry, thank you so much for your time.
Barry: Thank you very much, Kevin.