A WORLD REPORT SPECIAL EDITION ON THE PACIFIC RIM : THE SOUTH RIM : Real Estate : Housing Market in Sydney Broadening With Asian Influx : Despite strict investment laws and lingering prejudices, more foreigners are buying homes.

Ben Boyd Real Estate, with its modest, two-story facade in Sydney’s trendy Neutral Bay district, its window filled with photos of local houses and condominiums for sale or rent, looks like any other suburban realtor. It has just this one office in Sydney, a city of nearly 4 million people.

But what makes Ben Boyd Real Estate unusual among suburban realtors here is that the company has another office located almost 4,500 miles away in Hong Kong, as well as two associate offices in Singapore and Kuala Lumpur, the capital of Malaysia.

With its overseas connections, Ben Boyd Real Estate helped lay the foundation for the major influx of Asian buyers into the Australian property market that has occurred since the early 1990s.

Although vulnerable to currency and interest-rate fluctuations, this Asian influx now drives most sectors of the property market here, from middle-range to luxury apartments to commercial buildings and the luxury hotel sector.

Australia is hot property, and Asian foreigners are in the game.

The trend causes some muffled anxiety among many Australians, who seem nervous about the wave of foreigners coming ashore.

But they, like politicians and even real estate agents, tend to confuse the continuing Asianization of the Australian population--Asians suddenly appearing next door--with offshore purchases by Asian investors with no residential rights.

Real estate industry leaders say the strict rules governing foreign acquisition of residential property are not well-understood, even among real estate agents. They say the rules limit the potential for purchases by foreign nationals and foreigners assigned here by their companies.

“It’s not really a tremendous onslaught,” said John Nicoll, president of the Real Estate Institute of New South Wales, the industry association of 1,600 realtors in this state. “It’s a healthy level.”

In urban real estate last year, foreigners bought 14% of the properties sold, representing 18% of the value.

Richard Corbett, managing director of Ben Boyd, said “huge prejudices exist,” but he calls them hypocritical. Most offshore buyers before 1991 were somehow linked to Australia--through school, family or other connections--and thus were “not pure foreigners.”

But the market has changed quickly since then, Corbett acknowledged.

“When we started our Hong Kong office in 1979, we built our offshore market around Australian-educated Chinese there,” he said. “Many of them had family links with Australia or temporary or permanent residency rights to work here.

“Now the market is broadening,” he explained. “Now even a schoolteacher or a university lecturer in Singapore can afford to buy an apartment in Perth (western Australia) or Sydney. Wealthy Indonesians are starting to buy residential investments here. (South) Koreans and Taiwanese are getting very interested.”

Richard Corbett and his brother Peter, his partner in Ben Boyd, are renowned for their early adoption of “off-the-plan” sales in Asia.

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Under Australian investment laws, foreigners without any residency rights in Australia are allowed to purchase up to 50% of the condominium units in a new development, so long as they purchase “off-the-plan”--before any newly built condo is occupied for the first time.

They can also purchase residential real estate within a designated “Integrated Tourism Resort,” of which only 10 have been built in Australia, according to the latest information.

Foreign firms can purchase “developed” homes for their executives posted to Australia only if the executive lives here for more than 12 months. They must also sell the property when the assignment ends.

In 1993-94, the Foreign Investment Review Board, or FIRB, a branch of the Australian treasury that enforces foreign investment laws, approved 670 out of 677 “off-the-plan” proposals, nearly double the 352 such approvals given in 1992-93. About half the “off-the-plan” approvals were located in the Gold Coast of Queensland, Australia’s Miami Beach, and the rest were in Perth, Melbourne and Sydney, especially the latter’s harborside areas.

Tales of entire apartment blocks being sold “off-the-plan” are legion, but Corbett said the reality is less dramatic, if impressive nonetheless. He cited his latest touring exhibition for Dolphin Square, a 106-unit apartment complex in inner-city Chippendale.

Located close to both Sydney’s old Chinatown and the University of Sydney, which like most Australian colleges these days has a fast-growing minority of students from Asia, the complex is set to be completed by the start of the 1996 Australian academic year.

In Dolphin Square, prices are middle-range by Sydney standards--$112,500 to $135,000 for a studio, $142,500 to $187,500 for a one-bedroom apartment and $202,500 to $262,500 for a two-bedroom unit.

“I’m close to my FIRB limit of 50% sales off-the-plan,” Corbett said.

Most of his Dolphin Square sales are not mere deposits but contracts already exchanged.

“If a project won’t sell locally, it won’t sell offshore,” Corbett said. “But Asian buyers are unbelievably smart. They know value, and they now know the Australian market well.”

In the real estate executive’s experience, Asian buyers are “long-term holders,” and selling styles here have radically altered as a result. Some Asian buyers make short shopping trips while on vacation here or while visiting children studying in Australian schools or universities.

“Agents get excited when the Asians come in,” said Julie Bateson, director of Ray White Real Estate in Sydney’s Northbridge area. “Asian buyers . . . love peninsular and harborside sites, and they make quick decisions. Without them we’d be getting much lower prices,” she added.

“The average purchase price paid by foreign interests was about 80% higher than the average paid by Australian residents,” the FIRB report for 1993-94 noted, “suggesting a tendency for foreign investors to acquire more expensive dwelling units.”

In 1993-94, Singapore replaced Britain as the second-largest source of new foreign investment in all sectors of real estate behind No. 1, the United States, and was more than twice as big a player as Japan, the largest foreign investor by far in the years immediately before 1991.

“Recently there has been more Asian investment in the hotel and tourism sector in Australia than in the United States,” said Peter Barge, managing director of JLW TransAct, a hotel management and brokers firm.