Chinese New Year of the Tiger: Confident buyers ambush property prey

These buyers are more determined than ever to hunt down property prey with an increased, active ambition matched only by a sense of adventure and love of a challenge.

Yong Commercial Real Estate, Brisbane, principal Peter Huang, said the tiger’s well-known qualities of prosperity and power ensured it was always the leader in the animal field – and in the same way, he expected the property market to shine in 2022.

“I believe this year’s real estate market will be one of the strongest ever,” he said.

“I also believe this year of the tiger will inspire more property people to be bold, to show strength and courage, and to conquer any challenges they have faced in the past few years.

“This is the year of full recovery and we’ll bounce back stronger.”

Investors, in particular, are expected to sprint ahead of the crowd and ambush slower-moving buyers

With plenty of cash to splash, this distinctive group of buyers isn’t camouflaging its confidence but instead, has already ensured they’ve done above and beyond their financial due diligence.

Biggin & Scott Commercial director, Stan Sidiropoulos, said he knows plenty of landlords who had done “really really well” recently and were keen to reinvest.

“For these people, investing is their passion,” he said.

More buyers stalking property prey

Even for tiger types acclimatised to warm weather conditions, 2022 will be a hot year for property listings as well as good tenants and social demographics, according to Mr Sidiropoulos.

“I expect to see fewer listings, higher prices and more buyers in 2022,” he said.

“We’ve got a lot of buyers who have a lot of money in the bank and who don’t have to resort to finances such as superannuation money to buy a property.

“For a good property, you’ll have three to six people wanting that property who will set a benchmark of what yields they want and what cash rate they want to give their dollar for every dollar they invest.

“So it’s going to be a very challenging year for buyers and also sellers if they want to let go of some of their key assets to get good sales results.”

However, Mr Sidiropoulos encouraged these people to be resilient and wait for the right asset before pouncing.

“If that doesn’t work, you may need to have reset your yield benchmark,” he said.

These people will also need to take into account already tightening yields, Mr Haung explained.

“Traditionally the yields in Queensland are between 6%-8% but the yields for this year will come to between 4%-5%, or even 4%-6%, depending on the asset class,” he said.

Aggressive confidence on the rise

Also bearing a strong resemblance to the often aggressive tiger will be buyers’ increased levels of due diligence and negotiating confidence.

“I expect to see the highest ever level of due diligence from buyers and more aggressiveness in their finances prior to negotiating,” Mr Sidiropoulos said.

Commercial investors now have more proactive aggressive confidence, stability and resilience when negotiating a deal. Picture: Getty Images

“In prior years, buyers wouldn’t have done so much due diligence as regulations and regulators weren’t as strong and they weren’t watching the economy as strongly as they are now.

“But as a result (of these changes), buyers will be more confident in negotiating a deal because they’ve done their analysis and feasibility checks and they’ve got their finances under control.

“This, therefore, allows them to be more confident and more proactive in negotiating a deal and they’ll negotiate with confidence, stability and resilience.”

Chinese buyers claw their way back into market

The traditional two-week Chinese New Year holiday period sees many Chinese holiday makers travel to Australia to buy property as well as visit friends and family but no one could do so last year due to international border closures.

Despite these restrictions, REA Group economist, Anne Flaherty predicted late last year that 2022 would bring with it a higher commercial buyer market, particularly international investors in the $1 million-plus sector.

According to Real Capital Analytics, the latter group dropped by only 3% in 2020-2021,  compared to the five years preceding COVID, she said.

“Incredibly, despite the closure of our international borders, sales to offshore buyers still accounted for 33% of the total volume (of commercial sales) over 2020-2021 to date,” Ms Flaherty explained.

She believes this tiger-type tenacity, energy and ambition is highly compatible with that of the largest wild cat to prowl the planet.

Mr Huang concurred, explaining that he was confident Chinese buyers would soon claw their way back into the Australian commercial property market.

“This year, Australia’s international safe travel zones now include Japan, South Korea, Singapore and New Zealand and I believe the next group of countries to be opened will be Taiwan, China and Hong Kong,” he said.

“Once these three countries open in a few weeks or months, the Chinese market will flood back into Australia.”

In the meantime, however, Chinese buyers already in Australia, and those from other Asian countries, are expected to purchase plenty of commercial properties, according to Mr Sidiropoulos.

“There’s definitely money here, especially from second and third-generation Chinese,” he said.

One thing’s for sure: both buyers and sellers are relieved not to be facing another year such as 2020 when COVID first struck the world – and which, incidentally, was the Chinese New Year of the RAT.