Asian property investors are continuing to regard the Sydney property market as a safe haven for their cash with the Chinese in particular looking to buy new apartments, according to new research by Knight Frank.

Although the decline in Sydney property prices recorded in 2011 and early 2012 have largely stabilised, demand for new apartments remains relatively robust, albeit predominately in specific price brackets, with most of the demand concentrated in the AU$450-650,000 range for first home buyers and AU$650-850,000 for ‘up-graders’, with significant demand also coming from Asian purchasers.

According to the report, local Asian buyers, particularly Chinese, are currently accounting for around 50% of demand. Asian investors continue to view Sydney as a safe haven that is well supported by a strong rental market.

In what will add to demand from overseas buyers, the Hong Kong Government has recently placed a 15% buyers’ tax on offshore purchasers to assist in cooling the Hong Kong market. Consequently, Knight Frank expects there to be a large increase in buyer activity in the Australian residential market with buyers coming from China, Singapore, Malaysia, Indonesia and India.