29 November 2011
About 80 per cent of the people who buy Meriton's apartments are Chinese - and it's going to stay that way until Australian interest rates drop enough to bring locals back to the auctions.
The apartment's founder and boss, Harry Triguboff, says he'd like to see a more natural percentage of Chinese apartment buyers - say 30% to 40%. It would make his business a little less volatile, given the Chinese government keeps credit availability on a short chain, and it's been a yo yo lately, he says.
The Russian-born Triguboff has more in common with his Chinese buyers than you'd think. "High rise Harry" was born in Dalian to White Russian Jews who bolted to China to get away from Lenin. He spent his childhood in Tianjin (now China's third largest city) before coming to Australia shortly before Communism claimed China too.
Triguboff still sees rents going up - in fact, he says he's never seen them go down and that's not going to change. Part of that equation are those who famously stack two bedroom CBD apartments with significantly more occupants than allowed. A few of my friends from overseas, including those I came across during my Masters degree, fit this bill - although Harry says the practice is just as common amongst local renters, as affordability continues to be squeezed. He says he's given up on trying to police occupancy limits (how about investing in bunk beds? They'd be going cheap given falling modern Australian birth rates) and instead just charges them higher rents.
So why do the Chinese love our apartments so much? While some Australians (and politicians) may worry that the Chinese are artificially driving up prices, Harry says most of his customers are not speculators - they're here for the long haul. In fact, one quality they love about Aussie apartments is that when you buy, you've got it for life - as opposed to the leasing that goes on in China.
Dr (honorary doctorate from the Hebrew University of Jerusalem) Triguboff also says Chinese tastes aren't changing apartment design - they're pretty happy with the way we build them (or the way Harry does - Meriton is known for its er, value-for-money approach to high rises, and Asians generally have always had an eye for value**).
No matter what happens with Chinese credit, the Aussie dollar and inflation - Harry Triguboff says China apartment buyers are here to stay. They're getting to love Australia as much as we do.
* Who says the "mogul" cliche only needs to couple with the alliterative "media"?
** Frugality has always been part of Asian history - why do you think we have such a high savings rate? But that's a whole other blog post. Along with why there are so many Asians working in CFDs.
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