A recent Investorist survey found Melbourne was the second most preferred destination for Chinese to invest in property worldwide. Picture: Mark Stewart

One lender in particular, $1.5B Fund, has been tipped by experts to be a “game changer” for investors and developers from China, where there is “pent-up demand” for non-bank lending.

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$1.5B Fund began offering loans to nonresidents in August 2016 — just after Australia’s four major banks curbed lending to foreign property buyers without domestic incomes.

Investorist founder Jon Ellis said these restrictions “sent shockwaves” through the property industry at first.

“It was like a tap turning off — the (foreign buyer) market just stalled,” he said.

Investorist founder and chief executive Jon Ellis says loans for Australian properties becoming available through alternative lenders had made sentiment among his Chinese clients “more positive”.Source:Supplied

Mr Ellis said while foreign buying in Australia never entirely stopped, the country lost its position as the No. 1 choice for Chinese property investors as a result of the lending restrictions, along with other tax and Foreign Investment Review Board conditions.

The US took up that mantle, with cities like New York, Miami, LA and Houston becoming top foreign investment destinations, while UK property also became popular as the pound’s value fall following Brexit made it more affordable.

A recent survey by Investorist suggests Australia is back in vogue with Chinese buyers. Mr Ellis said this was partially due to loans becoming available through alternative lenders like $1.5B Fund.

Private lenders are offering loans to foreign buyers and helping them bypass the major banks.Source:Supplied

Melbourne was deemed the second most preferred destination for Chinese investors worldwide, by about 250 respondents quizzed after last month’s ‘Chinese Lunar New Year Golden Week’.

Golden Week is a week-long national holiday following Chinese New Year, when hundreds of millions of Chinese travel domestically and internationally, and many set their sights on real estate.

Victoria’s capital came in behind California, and ahead of Sydney, Bangkok and London.

The survey also found 60 per cent of Chinese who travelled during Golden Week spent part of their holiday inspecting property in Australia, while 60 per cent also said eduction was their No. 1 driver for investing in a city.

Mr Ellis said Melbourne’s superior universities and secondary schools were a drawcard for Chinese buyers, along with its “most liveable city” tag, and stable economic and political environment.

REA Group data shows Point Cook in Melbourne’s southwest was the Australian suburb most sought by China-based property hunters in the past six months.

Glen Waverley was the third most in-demand postcode nationwide, followed by Rowville in fourth, while Doncaster, Box Hill, Balwyn and Ringwood also made the top 10.

Investorist sales director for Asia Pacific Tim Graham said the Consumer Credit Code compliant $1.5B Fund was set to be “a game changer, particularly in the new build property market” which attracted large numbers of foreign buyers.

He said there was serious pent-up demand for this type of non-bank lending in China.

“It gives buyers the opportunity to ‘bypass the banks’ and source finance at competitive interest rates, starting at 5 per cent,” Mr Graham said.

“Many hard working foreign buyers who satisfy all the same borrowing criteria as Australians, as well as FIRB rules, have been penalised by banks’ blanket lending restrictions.”

The fund offers loans of $100,000 through to $1 million, to both individuals and companies, and for new, completed and under construction properties.

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Originally published as Foreign buyers bypassing Aussie banks