reporter2
20-06-14, 20:15
http://www.businesstimes.com.sg/archive/saturday/specials/property/decision-raze-sydney-mansion-dismays-many-20140619
Published June 19, 2014
Decision to raze Sydney mansion dismays many
Buyers' move to demolish home symbolises int'l clout of Chinese elite
[SYDNEY] In recent weeks, wrecking crews have embarked on a job that symbolises the international economic clout of the Chinese elite: razing an Australian mansion with stunning views of one of the world's most picturesque harbours.
Craig-y-Mor, an elegant 106-year-old home owned over the years by several prominent Sydney businessmen, was bought in 2008 by the son and daughter-in-law of a former senior member of the Chinese Politburo for A$32.4 million (S$38 million).
The new owners, Zeng Wei and Jiang Mei, sought permission to demolish the two-storey brick house and replace it, at a cost of US$4.5 million, with a five-level modern concrete structure with huge windows. The plan horrified some neighbours and government officials, who thought the new building would be too big and unattractive. After the municipality refused to allow the demolition, Mr Zeng's lawyers appealed to a state judge, who overruled that decision.
From London to midtown Manhattan to Hong Kong's Victoria Peak, wealthy Chinese - often connected to powerful political figures - are buying up some of the world's best real estate. Australia relies on China to buy much of its two main exports, coal and iron ore. But many say there's a downside to Chinese investment: surging property prices.
Even though Australia is sparsely populated, house prices in its biggest cities are comparable to those in Washington, San Francisco and Paris.
Sydney's average house price rose 15 per cent to the equivalent of US$613,000 in the year ended March 31, according to RP Data-Rismark, a research firm. Apartments overlooking the city's famous Opera House sell for more than US$10 million. Many younger college-educated Australians find it impossible to afford homes close to their workplaces without parental assistance.
"A generation of Australians are being priced out of the property market. Many face a lifetime of renting," an analyst at investment bank Credit Suisse, Damien Boey, wrote in a recent note to clients.
Credit Suisse estimates that 18 per cent of all new houses and apartments in Sydney are bought by Chinese citizens. In Melbourne, the figure is 14 per cent.
These figures are likely to rise. To stimulate the economy, the Australian government recently expanded a programme to grant permanent residency to foreigners prepared to invest at least A$5 million in Australian businesses. Ninety per cent of the applicants so far are Chinese.
Concerns that Chinese buyers could be driving a property bubble are so widespread that the Australian Parliament recently began an investigation into the possibility.
Research given to the inquiry by two academics found that people with Chinese surnames paid slightly less than other buyers for similar houses and apartments in Sydney, suggesting they are tough negotiators and aren't pushing up prices.
Many Australians aren't convinced, according to submissions to the inquiry from the public. "Widespread injustice will continue with Australians being outbid by foreigners on an uneven playing field," a woman named Pat Sutton wrote to the investigators.
The concerns reflect a belief among many people that Chinese citizens are using cities such as Sydney - an 11 +1/2-hour flight from Beijing - to protect their wealth from theft or seizure by the Chinese government.
Mr Zeng and his wife may have had another reason to choose their new home apart from Australia's strong defence of property rights and the 180-degree views of Sydney Harbour. Feng shui expert Gary Khor recently told the Sydney Morning Herald that Point Piper, the wealthy suburb where Craig-y-Mor is located, contains positive energy because it overlooks calm, moving water and has a hill to its rear.
Little is known about Mr Zeng's personal or professional life. His father is Zeng Qinghong, the vice president of China from 2003 to 2008 and a player in the leadership manoeuvring over the past decade that led to the rise of President Xi Jinping.
Foreign Policy magazine reported in 2012 that the younger Zeng was involved in the clandestine privatisation of the state-owned Luneng power generating company, which had over US$9 billion in net assets.
Workers began demolishing the home last month, an event that was front-page news here.
"They are knocking down something that was modest and thoughtful and replacing it with something that doesn't even have a thought in its head," said Elizabeth Farrelly, Sydney's most prominent architecture critic, in an interview.
Bill Malouf, a veteran real estate agent whose firm brokered the sale of the house, said in an interview that Craig-y-Mor wasn't in need of renovation. Chinese buyers prefer modern, symmetrical houses lacking the ornate detail common to many of Sydney's grand older homes, he pointed out. Views of the Sydney's iconic Opera House and Harbour Bridge are important, he added.
"He was always going to do a major renovation," Mr Malouf said of the buyer. "There was nothing wrong with the house."
The construction site at Craig-y-Mor has now turned into a regular stop on the Chinese tourist circuit, along with Bondi Beach and the Harbour Bridge. - WP
Published June 19, 2014
Decision to raze Sydney mansion dismays many
Buyers' move to demolish home symbolises int'l clout of Chinese elite
[SYDNEY] In recent weeks, wrecking crews have embarked on a job that symbolises the international economic clout of the Chinese elite: razing an Australian mansion with stunning views of one of the world's most picturesque harbours.
Craig-y-Mor, an elegant 106-year-old home owned over the years by several prominent Sydney businessmen, was bought in 2008 by the son and daughter-in-law of a former senior member of the Chinese Politburo for A$32.4 million (S$38 million).
The new owners, Zeng Wei and Jiang Mei, sought permission to demolish the two-storey brick house and replace it, at a cost of US$4.5 million, with a five-level modern concrete structure with huge windows. The plan horrified some neighbours and government officials, who thought the new building would be too big and unattractive. After the municipality refused to allow the demolition, Mr Zeng's lawyers appealed to a state judge, who overruled that decision.
From London to midtown Manhattan to Hong Kong's Victoria Peak, wealthy Chinese - often connected to powerful political figures - are buying up some of the world's best real estate. Australia relies on China to buy much of its two main exports, coal and iron ore. But many say there's a downside to Chinese investment: surging property prices.
Even though Australia is sparsely populated, house prices in its biggest cities are comparable to those in Washington, San Francisco and Paris.
Sydney's average house price rose 15 per cent to the equivalent of US$613,000 in the year ended March 31, according to RP Data-Rismark, a research firm. Apartments overlooking the city's famous Opera House sell for more than US$10 million. Many younger college-educated Australians find it impossible to afford homes close to their workplaces without parental assistance.
"A generation of Australians are being priced out of the property market. Many face a lifetime of renting," an analyst at investment bank Credit Suisse, Damien Boey, wrote in a recent note to clients.
Credit Suisse estimates that 18 per cent of all new houses and apartments in Sydney are bought by Chinese citizens. In Melbourne, the figure is 14 per cent.
These figures are likely to rise. To stimulate the economy, the Australian government recently expanded a programme to grant permanent residency to foreigners prepared to invest at least A$5 million in Australian businesses. Ninety per cent of the applicants so far are Chinese.
Concerns that Chinese buyers could be driving a property bubble are so widespread that the Australian Parliament recently began an investigation into the possibility.
Research given to the inquiry by two academics found that people with Chinese surnames paid slightly less than other buyers for similar houses and apartments in Sydney, suggesting they are tough negotiators and aren't pushing up prices.
Many Australians aren't convinced, according to submissions to the inquiry from the public. "Widespread injustice will continue with Australians being outbid by foreigners on an uneven playing field," a woman named Pat Sutton wrote to the investigators.
The concerns reflect a belief among many people that Chinese citizens are using cities such as Sydney - an 11 +1/2-hour flight from Beijing - to protect their wealth from theft or seizure by the Chinese government.
Mr Zeng and his wife may have had another reason to choose their new home apart from Australia's strong defence of property rights and the 180-degree views of Sydney Harbour. Feng shui expert Gary Khor recently told the Sydney Morning Herald that Point Piper, the wealthy suburb where Craig-y-Mor is located, contains positive energy because it overlooks calm, moving water and has a hill to its rear.
Little is known about Mr Zeng's personal or professional life. His father is Zeng Qinghong, the vice president of China from 2003 to 2008 and a player in the leadership manoeuvring over the past decade that led to the rise of President Xi Jinping.
Foreign Policy magazine reported in 2012 that the younger Zeng was involved in the clandestine privatisation of the state-owned Luneng power generating company, which had over US$9 billion in net assets.
Workers began demolishing the home last month, an event that was front-page news here.
"They are knocking down something that was modest and thoughtful and replacing it with something that doesn't even have a thought in its head," said Elizabeth Farrelly, Sydney's most prominent architecture critic, in an interview.
Bill Malouf, a veteran real estate agent whose firm brokered the sale of the house, said in an interview that Craig-y-Mor wasn't in need of renovation. Chinese buyers prefer modern, symmetrical houses lacking the ornate detail common to many of Sydney's grand older homes, he pointed out. Views of the Sydney's iconic Opera House and Harbour Bridge are important, he added.
"He was always going to do a major renovation," Mr Malouf said of the buyer. "There was nothing wrong with the house."
The construction site at Craig-y-Mor has now turned into a regular stop on the Chinese tourist circuit, along with Bondi Beach and the Harbour Bridge. - WP