Chinese property developers after the decline in foreign real estate investment in Sydney, Australia

Abstract

This study investigates how Chinese developers responded to the changing patterns of investment in residential real estate in Sydney since 2010. The analysis also outlines the key lessons for cities around the world with high levels of Chinese foreign buyers and developers, which may experience a similar foreign real estate investment decline as a result of changing dynamics in domestic real estate markets, changes in China, and/or wider changes in the global economy or other key global events. Unlike Chinese individual foreign real estate investors who largely exited the real estate market after 2017, Chinese property developers remained committed to the domestic market in Australia. As such, this analysis is framed by a period of individual foreign capital withdrawal and is focused on foreign developers rather than individual foreign real estate investors. The paper argues that focusing on the actions of foreign developers in a domestic real estate market is important because the organisational structure and business practices of foreign developers can be vastly different to those of domestic developers. The analysis shows that since 2017 Chinese developers responded in two ways to the changing residential real estate market in Sydney: (1) they revised their sales strategies to target different customer groups; and/or (2) they changed their building practices.