A decade ago, it would have been quite rare in Australia to see large cranes silhouetted against the skylines of the outer suburbs of Australian cities, but that is indeed what we are seeing more and more of in cities like Melbourne and Sydney, as councils gradually permit increasing building heights.

What is particularly interesting is how many of these sites are being developed by Chinese developers, many building for overseas buyers. Is this creating an overheating or potential bubble within our residential development industry? Some might say yes, and others might say no – it depends on who you ask.

One long-established local developer I spoke to expressed concern of a flood of apartments in Melbourne within the next two years. We also need to ask ourselves how the infrastructure of cities such as Melbourne will cope with these rapidly rising populations.

However, on the flip side, these developments are doing great things for our local economy – our local banks, architects, town planners, lawyers and builders are certainly not complaining about the additional business these overseas developers and buyers are bringing with them to Australia.

A local real estate boom with Chinese buyers in particular has a flow-on effect on our education sector. In addition, many of these new modern migrants buy businesses, fit out their apartments, buy cars, purchase health insurance and encourage friends and relatives to visit Australia as a holiday destination. The flow on effect beyond property by these new migrants is speaking for itself.

So, is there a potential bubble being created in Melbourne by Chinese developers? Judging by the complaints from Chinese developers in Melbourne, maybe yes.

From where I stand, there seem to be more Chinese developers than sites, chasing each other for projects. Peter Hua, the owner of AlphaMAC Property Group, a specialist marketing and development company, confirmed to me, that the majority of his sites sell within a week – and that is just through his own database. Recently he offered a site a project to build 10 town houses – and had 36 offers within 48 hours of marketing the plan.

Should we be concerned? In my opinion I believe that our city and other Australian cities can, and will, benefit from an expanding population coming from China and beyond.

Carl Jetter
Publisher, Australia China Connections. ■