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Apartment boom drives 20 percent of Australia's economic growth, Chinese big factor

Xinhua, September 9, 2015 Adjust font size:

Chinese investors have been a main factor in an Australian apartment boom which analysts claim has been responsible for a fifth of Australia's economic growth in the past two years, it was reported on Wednesday.

The leap in apartment building across the country is helping the economy wean off the declining mining construction sector which had been driving the economy.

And Chinese have been the biggest foreign investors, News Corp reported.

Analysis by real estate company CBRE shows Chinese investors have led the rise in foreign investment in residential developments.

In the year to April, foreign buyers secured 54 of the 115 inner-city development sites sold in Sydney, Melbourne and Brisbane, and Chinese developers were responsible for 36 of those deals.

The number of new apartment projects getting approval from local councils has almost doubled since 2012-13 to 105,000 new dwellings over the past financial year.

Apartments accounted for 95 percent of the growth in housing construction in that period.

The latest June quarter national accounts showed housing construction was worth 4.3 billion Australian dollars, 24 percent higher than in the same quarter two years ago.

Deloitte Access Economics partner Chris Richardson says housing construction is a relatively small sector of the economy, but is important at turning points in the economy, because it is one of the most volatile sectors.

At its low in 2012, it fell to 4.5 percent of GDP but it's already up to 5.5 percent of GDP, so one percentage point of growth has come from a tiny sector," he said.

News Corp reported Chinese development companies had invested at least 2 billion Australian dollars in the past two years and were the biggest foreign player in the market.

Colliers International managing director of residential Peter Chittenden believed the wave of Chinese buying will continue. Colliers International has just sold three separate apartment sites in Sydney for more than 150 million Australian dollars each.

Chittenden said there were 25 under-bidders in the sales, leaving about 4.8 billion Australian dollars' worth of capital for apartment projects to develop. Endi