Sydney remains one of the cheapest ‘gateways’ to the West for Chinese investors, as the federal government woos overseas investment

Sydney celebrates Chinese New Year. (Richard Ashen, Pacific Press, LightRocket via Getty Images)
  • Sydney has ranked as one of the most affordable ‘gateway’ cities in the Western world for Chinese investors looking to move.
  • The data from Chinese real estate platform Juwai IQI shows Sydney remains globally competitive when vying for foreign investment, costing around $3.15 million to maintain a certain comfortable lifestyle.
  • The insight comes after the Morrison government began to quietly fast-track investor visas, which have overwhelmingly gone to wealthy Chinese nationals.
  • Visit Business Insider Australia’s homepage for more stories.

Australia may feel prohibitively expensive to locals, but it still ranks as a steal to the kind of overseas investors the country is increasingly looking to attract.

As the Morrison government streamlines visas to increase the supply of foreign investors entering, new research reveals there’s no shortage of demand among China’s wealthiest.

Analysing the true cost of major cities in the Western world, Chinese property platform Juwai IQI has ranked Sydney as among the very cheapest for investors looking to maintain a certain lifestyle.

“You can buy comfortable financial freedom in Sydney and still have more than $US1 million left over, compared to Hong Kong or Shanghai,” Juwai co-founder Georg Chmiel told Business Insider Australia in an email. “Financial freedom costs $US1.55 million less in Sydney than in Hong Kong and $US1.1 million less than in Shanghai.”

Specifically, Juwai defines this class of financial freedom affluent Chinese clients are looking for as including a well-positioned urban home, two nice cars, with at least $1.54 million left over to invest and $115,000 in annual income flowing in.

On this somewhat specific scale, Sydney ranks as one of the cheapest ‘gateway’ city in the Western world, only beaten by Seattle in the United States and the Malaysian capital Kuala Lumpur. In Sydney, the price tag for all of this reads $US2.45 million ($3.15 million), ranking it as less expensive than New York, Toronto, Singapore, Vancouver, Hong Kong, and Shanghai. London, the most expensive city, would cost $US2.1 million, or 86%, more than the Emerald City.

It’s helped by the fact that despite the elevated state of property prices, Sydney remains far more spacious than comparable cities.

“It is eminently affordable for many Chinese families to use the capital gains from their Shanghai or Beijing apartment to purchase a much larger home in Sydney and also fund their lifestyle, as well as private schooling for their children,” Chmiel said.

“This is an international version of what you commonly see in Australia, with people selling up in Sydney or Melbourne and moving to Queensland to have a bigger home, more outdoor space and a more affordable lifestyle.”

Wealthy Chinese nationals are dominating investor visas

It comes after Business Insider Australia revealed that the Morrison government had begun fast-tracking visas for the rich and powerful back in September, prioritising new investment over skilled workers in a post-pandemic economy.

Separate Home Affairs data reveals exactly how important China is to that particular strategy of courting foreign nationals with at least $1.5 million to invest. Newly obtained by Business Insider Australia under the Freedom of Information (FOI) Act, figures show Chinese nationals lodged nearly two in every five applications for the 188 investor visas last year but ended up receiving the majority, or 55%, of all approvals.

If you include applicants from Hong Kong, the group swells to almost 70% of all approvals.

Combing through the numbers, it becomes apparent that the pandemic – hitting China hard at the beginning of that year and disrupting visa applications generally – actually depressed numbers. In 2019, more than 4,500 Chinese nationals were approved for 188 visas, double the 2020 figure. Those from the mainland were alone responsible for 70% of all approvals.

The internal instruction by former immigration Minister Alan Tudge to prioritise investor visas above skilled workers and those working in critical sectors has had a profound impact on the pace of approvals. The raw data shows Home Affairs has tripled investor approvals since September when the Minister’s order became effective.

Those have overwhelmingly benefited wealthy Chinese immigrants. For example, if you narrow the field to just significant investor visas (SIVs) – those with $5 million to spare – China’s outsized impact becomes even more evident. According to separate data obtained by the AFR, Chinese nationals have collected 90% of all SIVs since the scheme was conceived in 2012 by a Labor government.

None of the data obtained indicates where investors are settling, but census data confirms Sydney remains the preferred Australian city among Chinese from all walks of life. Around half a million people born in China live in Sydney, making up more than 10% of the city’s population and around 40% of the entire Chinese diaspora in Australia.

While the vast majority aren’t recipients of investor visas, it’s noteworthy that at least some residents still consider the city affordable.