News Blog - Commercial
UNDERSTANDING CHINESE BUYERS
With more and more Chinese buyers entering the Australian property market, there are some vendors, agents, bankers, and brokers to name a few, that feel frustrated by the buyers’ behaviour. Many of these do not understand why Chinese people pay inflated prices, and engage in ‘crazy’ behaviour such as bargaining, arguing and jumping around to secure a property.
Historically, Chinese people like to own property. The belief is to own something, not borrow or lease land that does not belong to you. Looking back through the decades, prior to 1949 with the rise of Communism, many Chinese used to own their land; houses, farms, factories, shops and other assets. But once Communism came to power, the landscape dramatically changed with all things being of course commonly shared. In spite of this, the ideology of asset ownership is still rooted in Chinese peoples’ minds. So Chinese people buying property is not following a ‘trend’, but rather it is part of their tradition.
We like to bargain.
It’s true, us Chinese people like to bargain no matter if we are rich or poor. To buy through bargaining in China is very popular, and it is how the majority of people operate. This behaviour is two pronged. Firstly, if you buy an item, and you did not bargain you would be regarded as a fool, because everyone bargains! Secondly, on a psychological level, if you get a good deal or bargain, you feel better, you win, and ‘you win face’ in Chinese culture. And face is very important, more important than fiscal gain. So people who buy something they can afford still bargain, even for a very small amount money.
We value relationships!
Of course, not everyone is like this. Some Chinese purchasers don’t believe in bargaining, which may work against them. Vendors can pre-empt the bargaining tenacity of a Chinese buyer by inflating the property price, purely on the assumption that prospective buyers will bargain down. This strategy can be detrimental to the vendor. Once Chinese buyers find out that they’re ‘being played’, they will never go back to you, as Chinese culture places value and relationships above all else. If they find you to be honest, polite, reasonable, friendly, they will go back to you for repeat business as well as recommend you to their network – which is always extensive! Sometimes, relationships are worth much more than money, and, if the relationship is fantastic, Chinese buyers may even be happy to pay a little bit more.
So, my suggestion is to not ‘rip off’ or be too harsh on Chinese business, especially in the beginning. If you want long-term business, you must be gentle and understanding. Chinese have a saying ‘less profit but long term business’. Do not kill the goose and take its egg!
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