China's Golden Week is here, but where are the foreign buyers?

China’s Golden Week annual holiday has come around again, and prestige agents are watching keenly in the hope it heralds a return of the foreign trophy-home hunters.

Fuelling those hopes is the confidence boost from last week’s first nine-digit house price record, good inquiry levels on key properties and a falling Aussie dollar, down  11 per cent from its January peak to 71 cents against the US greenback.

Casting a pall over the market is the impact of last year’s increased taxes on foreign buyers, China’s crackdown on foreign investment in property and a drop in the number of significant investment visas granted to foreign investors.

“If we’re going to see the Chinese buyers return, it’ll be this week,” said Darren Curtis, of Christie’s International.

“This is one of the high points of the year, coupled with the Chinese New Year in February.”

Locals have so far dominated this year’s big-ticket sales, chief among them tech billionaire Mike Cannon-Brookes who paid about $100 million for the Fairwater Estate after a 16-day sales campaign by Christie’s Ken Jacobs.

Given the Aussie dollar’s recent falls, a deal at $100 million by the chief of the Nasdaq-listed Atlassian software giant translates to US$71.8 million,  a point not lost on a lot of buyers from mainland China who mainly deal in US currency, said Curtis.

Among the high-end homes hitting the market in time for Golden Week is the Hunters Hill estate Windermere, owned by businessman Sam Guo, known locally as the Chinese Gatsby thanks to his lavish parties and hospitality.

Jessica Ke, of Ausrealty Estate Agents, has not offered a guide but says it is hoped to match last year’s $18 million sale of Cate Blanchett’s home Bulwarra a few doors away.

Ray White Mosman’s Geoff Smith says he has been taken by surprise by the level of enquiry from China on the $35 million waterfront home of former Woolworths boss Bill Wavish and his wife Vonnie at  Kurraba Point.

Given a fairly equal distribution between local and foreign buyer enquiry Smith says it remains to be seen who buys it. “But the enquiry is a turnaround on recent months,” said Smith.

The state government’s decision to raise the foreign buyer stamp duty surcharge from 4 to 8 per cent in July last year was followed by an increase in the land tax surcharge for foreigners from 0.75 per cent to 2 per cent early this year.

“Those measures took out the expat buyers from the local market first, and then impacted the smaller foreign-buyer market,'” Jacobs said.

It is a dramatic turnaround on the Golden Week of five years ago when foreign buyers were reportedly chauffeured from trophy home to trophy home, and recruitment industry boss Julia Ross sold her Point Piper home Villa del Mare for $39 million to Chinese billionaire Xu Jiayin.

Six months later however, treasurer Joe Hockey announced the forced sale of Villa del Mare because it was sold in contravention to foreign-ownership laws.

“Agents will be watching how Golden Week pans out, but the trend has been that the impact has lessened each year since 2015 because of both the Chinese government’s crackdown on capital outflows and our own government’s decisions,” said Jacobs.

The Department of Home Affairs figures show a marked drop in the number of fast-tracked investment visas for foreign buyers last financial year, with 183 significant investment visas granted in the 12 months to the end of June, well down on the 405 for the year prior.

“The balloon has deflated over the past three Golden Weeks,” said Carrie Law, chief executive of Chinese real estate website Juwai.com.

“We still see some transactions, but it’s not the free-for-all of past years. Instead, we see a transaction bump in places like Japan, Malaysia, and Thailand, where prices are lower and it’s easier to send money.”

Juwai’s figures show a steady drop in buyer enquiry this year, down 6.3 per cent in the September quarter from the June quarter, and a drop of 9.2 per cent from the same quarter last year.

Not helping the foreign buyer market are the Australian banks, who have stopped lending to people with foreign incomes, said Joanne Dai, a former investment banker-turn-selling agent at Century 21 City Quarter.