Chinese investment revival in Australian property possible
High-profile credit issues among some of China’s largest property developers and slowing real estate market may cause local investors to once again turn to Australia to secure their money.
Credit issues among some of China’s largest property developers and a slowing real estate market there are set to make Chinese investors turn once again to Australia to spend their money.
Several of China’s largest property developers, including Evergrande, were revealed to be facing uncertain futures at the tail end of last year, casting doubt over the sector’s future.
As a result, property sales and price growth have slowed, further exaggerated by the broader issue of housing oversupply.
Chinese property portal Juwai IQI co-founder and group managing director Daniel Ho said given the local preference to invest money in property, it made sense that many would turn to Australian property stock.
“Chinese are used to much faster price growth than we expect to see in 2022, and the weaker forecast for property in China is raising buyer’s horizons and encouraging them to look overseas for real estate investment,” Mr Ho said.
“Mass-affluent and high-net-worth Chinese have accumulated savings during the pandemic, just as Australians have. They have money to invest and want both safety and returns.”
Large-scale developer Evergrande sparked international concerns in September when the company came close to defaulting on billions of dollars of debt. It is estimated to owe more than $400bn to international creditors and has missed several key interest repayment deadlines since
A domino effect has gripped the Chinese property sector in the five months since.
Data from international property firm Knight Frank found prices through mainland China rose 3.2 per cent over the year to September, ranking 47th in the world for growth. In contrast, Australia was considered the fifth-fastest-rising country over the same period, up 18.6 per cent.
Juwai IQI expects average residential prices in China to fall 1 per cent in the first half of 2022.
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