Auckland's commercial scene is taking off thanks to overseas investors

Ray White's Auckland commercial sales have more than doubled this year compared to last year, according to Ray White Auckland Commercial's Managing Director Bruce Whillans, in his 2014/2015 second quarter update.

The birth of a two-tiered market

Interestingly, domestic settled sales decreased from 2013, while an exponential increase in overseas investment boosted the performance of the Auckland commercial real estate sector.

Mr Whillans notes in his report that in the last 12 months over half of his office's business came from high-net-worth resident and non-resident Chinese individuals and investment companies. This is in contrast to the 12 months preceding June 2013, in which only 22 per cent of buyers were overseas speculators, and none of them originated from China.

In a 2 February Sunday Star Times article, Mr Whillans alluded to the fact that many Chinese investors chose to immigrate and purchase residential real estate, and then invest large amounts in land banking or commercial assets.

​Mr Whillans pointed out that this meant a lot of his business therefore came from Ray White residential branches, who had sold clients a home and wished to assist in their business investments as well. The sharing of opportunities that span across different markets within the real estate sector show the attitude of foresight and cooperation that makes Ray White Commercial a success in the country's largest business hub.

The inflow from China

Chinese investment outside of the mainland is expected to increase according to ANZ's chief China economist, Li Gang Liu. The Hong Kong-based economist keeps a close eye on monetary policy in the People's Republic, and noted in a 17 October interview with the New Zealand Herald that China's overseas financial presence is set to expand.

According to Mr Liu, in a bid to promote the use of the yuan currency internationally, the People's Bank of China is introducing a plan that will allow Chinese nationals to increase their overseas holdings through a Qualified Domestic Retail Investor Scheme.

Although Mr Liu points out that there is no specific time-frame outlined as yet, he expects the effects to be felt from later this year and into 2015.

New Zealand and Australia have become hot destinations for Chinese nationals to study, immigrate and invest, and increasing trade cooperation and investment transparency looks to see this trend continuing. It seems that Mr Whillans and his Auckland office can expect a busy year ahead.