Not far from city’s heart, another CBD seen as hot property
Depending on who you talk to, Australia’s property market is so overvalued it is only a matter of time before the bubble bursts and the whole lot comes tumbling down.
Liu Hao disagrees: “I do not think (the market) is as bad as some are saying.”
The 34-year-old executive director of property developer Starryland Australia is buoyant about real estate Down Under.
Born in Wuhan, capital of Hubei province, where his father worked as a small developer, Liu got his degree at Bradford University in the United Kingdom.
Despite the doom and gloom in the media, developers have not given up. There is no shortage of investors especially from Asia wanting to buy into the Australian property market, despite Australian banks cutting credit to foreign borrowers.
None of this has been lost on developers, especially those from Singapore, Malaysia and, in particular, China who have spent more than A$1.1 billion ($802 million) on properties in Sydney, Melbourne, Brisbane, the Gold Coast and Perth over the past three years.
They still see Australia as a good place to conduct property transactions, citing the country’s ease of doing business, stable economy and political system.
Among the Chinese developers making their mark Down Under are Greenland Group, China Poly Group, Country Garden and, of course, Starryland, the Australian arm of Wuhan-based Fuxing Huiyu Real Estate.
Liu said a lot of comparisons are made between Sydney and Melbourne but the two markets are very different.
“In Melbourne there is probably an oversupply of flats, especially around the Southbank area. But in Sydney that is not the case.”
The A$550 million development on the banks of Sydney’s Parramatta River, set amid lush parkland, is the company’s first venture in Australia. It has gained a great deal of publicity since it began in 2014.
The development is just 1.2 kilometers from the heart of Sydney’s second central business district, Parramatta.
It has become the showcase for the company. Parramatta is undergoing a major facelift to accommodate companies relocating from Sydney’s overcrowded CBD.
“We chose Parramatta because of its cosmopolitan center, good transport links and its huge growth potential.” The first phase units of the 773 apartment development sold out when they went on the market two years ago, with the second and third phases going much the same way.
“(Australia’s property market) may have been overheated a few years ago. But I think it has come off the boil,” he said.
“All those cranes you see dotting the skyline around Sydney are building properties that have already been sold.”
Liu added that the rule of the game in Australia is to presell at least 70 percent of the total development before the banks will lend any money.
“The problem with Sydney is that it is hard to find large suitable sites close to the city … you have to go a fair way out from the CBD.”
Liu’s path to the heady world of high-end property development amid the glamour of Sydney came via a circuitous route.
After graduating, Liu worked at TK Maxx, a discount retail chain in Bradford. He then moved back to China where he worked for a developer in Wuhan and married someone he had known since primary school.
“It was my wife who convinced me to move to Australia,” he said. “She said the climate was good, the people were friendly and it was a good place to bring up kids.”
Liu first moved to Melbourne where he worked as a project manager for a builder. He joined Starryland in 2013 as executive director, and became responsible for managing the acquisition, financing and development of residential projects.
“I guess we are different to many developers,” he said. “We are not just building apartments, we are building and developing homes for people to live in and raise families.
“When we pick a site we look for three things: Is the site near public transport? Does it have easy access to shopping? And is it close to schools and universities?
“For us, Parramatta ticked all those boxes.” However, it was not all smooth sailing for Starryland when it started in Australia in April 2014.
“I think one of the main issues not only for us but any Chinese developer setting up in Australia is understanding the cultural differences between the two countries and how those differences can be overcome.
“Regulations are different between states in Australia and sales strategies and marketing have to be adapted to the local environment. But it is the cultural differences that pose the biggest challenges.”
Liu made a point of hiring staff who understood the Chinese parent company’s culture while at the same time having a good understanding of Australian industry.
He credits Starryland’s success to having the “right team” and “good communications with our parent company back in China”.
“The fact there is only a few hours’ time difference between us and our parent company is a great advantage. But first and foremost we pride ourselves on being a good local company.”
Starryland is proud of its buildings and ensures quality through using the best contractors, Liu said.
“We have managed to build a successful team. How we work with local suppliers, how we respect the industry and the market, how much effort we are putting into building the company I am proud of that.”
Starryland intends to be in Australia for the long haul.
“We have no intention of leaving. We are quite optimistic about the future.
“When you look at the projections for population growth, especially along the eastern seaboard, you also see a demand for property whether it be apartments or houses.”
Liu added that Sydney, Melbourne and Brisbane are expanding to meet growth, and the property developer aims to be involved. “Besides that, our parent company sees Australia as an important step in building a global profile.”
The Australian property market may be coming off the boil, but the value of residential construction projects that began in Sydney in the 2015-16 financial year (July 1 to June 30) was A$23.7 billion, according to analysis by property agent PRDnationwide. This figure is more than triple the previous year’s A$7.7 billion.
But it was Parramatta that outstripped all other suburbs in Sydney with projects totalling more than A$1 billion.
Analysts say the reason for Parramatta’s building boom is its demographic profile. The population today is younger, employed in while-collar professions and earns more than people who lived in the area a decade ago.
Often referred to as the gateway to Western Sydney, it is here that much of the city’s growth will take shape over the coming decades.
“As Parramatta grows, I would like to think we helped play some part in that growth,” Liu said.
“For me, the great satisfaction is knowing we have built good, quality homes for people. And as a developer I do not think you can ask more than that.”
For me, the great satisfaction is knowing we have built good, quality homes for people. And as a developer I do not think you can ask more than that.”
executive director of property developer Starryland Australia