Chinese hunger for our property strong despite Beijing curb

The property industry is confident Beijing’s efforts to rein in capital outflow won’t stop Chinese investment here.

Much of Australia’s property industry is confident — fuelled by fresh evidence this week of massive investment — that Beijing’s efforts to rein in Chinese capital purchases offshore will continue to fail, and that real estate prices will reflect an ongoing Chinese hunger for Australian housing.

A Credit Suisse report last week found about 25 per cent of the value of new property supply in NSW, 17 per cent in Victoria and 8 per cent in Queensland, has been bought this year by foreigners, 90 per cent of whom are Chinese.

Jane Lu, Chinese property website Juwai.com’s Australia head, said on Friday that Australia was the second-most popular country for Chinese buyers offshore.

“China’s capital controls have been very successful, but without making it impossible for ordinary Chinse families to buy property in Australia,” she said, and despite the annual limit of $US50,000 ($64,000) per person.

Credit Suisse said that in December 2016, Chinese authorities introduced new and stronger capital controls to slow money flowing out of the middle kingdom. “Our tax receipt data help measure how effective these controls have been — and it seems they haven’t been.”

The company said it could not see any evidence of a slowdown in foreign demand in either NSW nor Victoria could because of the stronger capital controls. Therefore “Chinese demand for Aussie property continues at a strong rate despite the government’s efforts”.

Ms Lu said Chinese buying off the plan had enabled more construction in Australia, “making more homes available for other buyers”.

She added that 2015-2017 “were the biggest years on record for Chinese investment in Australian residential real estate”, with 2016 the standout year. In that year, NSW doubled its stamp duty surcharge for foreign buyers to 8 per cent, and Victoria more than doubled it, from 3 per cent to 7 per cent. But this still fell short of the charges on foreign buyers in Singapore, Hong Kong and Canada.