In order to boost sales and attract Asian buyers, real-estate developers in Australia are using Hollywood-style red carpet premiers to help drum up interest in their developments, The Wall Street Journal reported. Despite the glitzy showings, banks have warned the Australian property market might be not be all that appears.
Crown Group was the latest developer to host one of these flashy events. They gave guests an exclusive preview of its Infinity project that is 20-stories and located in Sydney. The WSJ added that fashion label Armani sponsored the event while Swarovski and Jack Daniel’s also had a corporate presence. Crown Group hosted similar events in Singapore and Jakarta. The project is close to selling out due in part to the success of these premiers.
The primary buyers at these events are wealthy Chinese and people from around Southeast Asia with an interest in Australia real estate. These buyers have helped create a residential construction boom that has helped the country’s economy as the mining boom comes to an end, according to The WSJ. Foreign investors who want to purchase real estate in Australia must do so before construction begins.
Central bank in Australia warned that risks to residential property developers are growing despite all the glitz and glamour in the market at the moment. Melbourne and Brisbane face an oversupply of apartments that could spell danger if there is any sudden collapse in home prices. The threat would extend to Australia’s banks and economy as a whole. “People underestimate how much residential construction has been propping up the economy,” Warren Hogan, chief economist at Australia & New Zealand Banking Group told the newspaper.
New residence approvals in the country were at an all-time high through August, with permits given to build high-rise apartments seeing a noticeable increase. These permits now make up 31 percent of the total, up 20 percent from six years ago, according to government data.
