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Chinese millionaires favour Australia as new land of opportunity

Man standing in front of Yarra River with Flinders St Station in the background.
Jun Hao Hu and his family left China in 2016 for better prospects in Australia.

Supplied: Jun Hao Hu

Australia is the top destination worldwide for millionaires to migrate to, according to a recently-released report, and it's super-rich Chinese who are settling here in the biggest numbers. Jason Fang looks at why Chinese millionaires are choosing Australia and the impact they're having when they get here.

Jun Hao Hu, a successful businessman from Shenzhen in the south of mainland China near Hong Kong, decided to move to Melbourne with his wife and two children in 2016.

He did so by applying for the so-called Significant Investor visa which aims to attract wealthy people to invest and settle in Australia.

To apply for this visa, people must invest at least $5 million for four years in specific investment categories in Australia before being eligible to apply for a permanent visa.

The scheme started in November 2012, and had attracted nearly 1,750 successful applicants by the end of February 2017, and a total of $8.73 billion in foreign investment to Australian shores, according to figures from the Department of Immigration and Border Protection.

Of these applicants, nearly 90 per cent are from China.

Why Australia?

"I chose to come to Australia for a number of reasons," says Mr Hu.

"First of all, [Australia] has one of the best education systems in the world. Secondly, the physical environment is second to none."

- Jun Hao Hu

"Besides that, I have already got a few friends living in Melbourne."

Newlyweds posing for a photo in a lavender field.
Lifestyle is an important factor for Chinese millionaires choosing to migrate to Australia.

ABC: Fred Hooper

For the second straight year Australia has been the top country worldwide for millionaires to migrate to, according to The 2017 Global Wealth Migration Review released by consulting firm New World Wealth.

It also finds that investor visa programs are becoming increasingly popular with Chinese millionaires, with Australia their favoured immigration destination.

Millionaires on the move in 2016

Top 5 by net inflows of millionaires: Top 5 by net outflows of millionaires:
• Australia: 11,000 • France: 12,000
• USA: 10,000 • China: 9,000
• Canada: 8,000 • Brazil: 8,000
• UAE: 5,000 • India: 6,000
• New Zealand: 4,000 • Turkey: 6,000

Source: The 2017 Global Wealth Migration Review, New World Wealth

Lena Hung is an Australian migration lawyer from Lena Hung & Associates and handles many Significant Investor visa cases.

She says to many Chinese, Australia represents a high quality of living and offers many opportunities for new investors.

"Australia has got a lot of business and investment opportunities, and… top education facilities for schools and universities. We've got a healthy environment [and] very good air quality here in Australia."

- Lena Hung

Australian property a popular investment

A tall apartment building under construction
Many Chinese millionaires are keen property investors and developers.

ABC: Simon Leo Brown

Figures released in March 2017 show that property remains a popular investment for Chinese millionaires. Chinese investment accounts for almost 80 per cent of all foreign housing demand in New South Wales and Victoria.

Ms Hung says according to the immigration department rules, Significant Investor visa holders face strict investment restrictions for their initial $5 million investment, but there are no restrictions for further investment in Australia.

And this is having an impact on the local property market.

"I think that the interest from Chinese investors can be considered a big factor in causing the property prices to increase."

- Lena Hung

However she points to other factors which may also be contributing to rising prices, including lower interest rates and policies such as negative gearing and capital gains tax discounts.

"Despite the increasing house prices and additional tax implications for foreign investors, it is interesting to note that median property prices and investment value in Australia are still reported to be much more attractive than property investment in China."

For example she says, a report from Bloomberg and the Australian Bureau of Statistics noted the median price of an apartment in Melbourne is $500,000, whereas in Beijing it's close to $1 million.

Associate Professor Jie Chen from the University of Western Australia says many Chinese millionaires already invest in property or property development back in China and "would like to expand their property portfolio worldwide".

"Compared to property markets in Beijing, Shanghai, Guangzhou and Shenzhen, Australian property prices are relatively cheap and unlike China, properties here come with the permanent ownership of land as well."

Currently in China when you buy a property, you are only leasing the land the property is on from the government.

Making the move

Shanghai skyline at dusk.
Associate Professor Jie Chen says rich Chinese choosing to settle in Australia generally have great connections back in China.

Flickr CC: Tyler

For many migrants from a non-English speaking country, it is hard to settle in Australia initially, but Mr Hu says he felt well-prepared before his move.

"Before [I came here], I had travelled to Australia more than 20 times for business. I felt like I was not a stranger to Australia.

"I understood that Australian business culture was very different to the one in China. I was fully prepared before applying for the visa."

- Jun Hao Hu

"After arriving in Australia with my family, I have also discovered quite a number of business opportunities in the fields of wine and health products which have a great market back in China."

Associate Professor Chen believes many super-rich Chinese businesspeople tend to be well-travelled and are familiar with life in the West.

He says after settling in Australia, these migrants choose to frequently travel between Australia and China themselves, while their families are living in Australia.

"Many rich Chinese migrants are extremely busy. Although their language ability is questionable, they are financially resourceful and equipped with business know-how and connections in China."

- Associate Professor Jie Chen

Julius Wei, co-founder of a wealth management business BMY Group which targets rich Chinese migrants in Australia, agrees.

"These Chinese millionaires, disregarding the industry they are in, are very sharp in finding business opportunities.

"They would be great assets to growing trade between Australia and China."

This story is also available in Chinese.

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