Are Chinese property concerns “overblown”?

ScreenHunter_1711 Mar. 18 07.25

By Leith van Onselen

The decision yesterday by the Federal Government to commence a review into the impact of foreign purchases of residential property, and whether foreign buyers are being property regulated, has already generated opposition, with the president of the Australia-China Business Council, Duncan Calder, labeling concerns “overblown”, citing that Chinese property investment actually fell by 18% over the past two years, and citing that “there are a lot of positives from the flow of Chinese investment into real estate” and that “if we didn’t have those flows,  I think what would follow is we would see a fall-off in our property development, and that would mean a loss of jobs for Australians.

There are a few points that I would like to make about Calder’s statement.

First of all, focusing only on Chinese investment is a mistake. Overall foreign purchases of Australian real estate is the issue – be it from China, Europe or America – along with the monitoring and enforcement of the rules by FIRB. After all, a Chinese national purchasing property has just the same impact on the market as a European doing the same.

Second, most people (me included) are not particularly concerned about foreigners purchasing off-the-plan properties, since they at least add to supply (to the extent that they are not kept vacant). Moreover, the construction of such dwellings also provides economic activity and jobs, and is a form of export.

Rather, the concern about foreign purchases relates to the purchase of pre-existing dwellings, which do not add to supply or economic activity, and simply put upward pressure on house prices (at the expense of younger locals). And it is here where Calder’s claim that foreign investment has fallen misses.

As shown by the below table, the overall fall in foreign property purchases was driven by a $5.2 billion drop in “developer ‘off-the-plan'” purchases in 2012-13 (shown in green). By contrast, purchases of pre-existing dwellings rose strongly in 2012-13 to 5,091 properties valued at $5.42 billion.

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It is the efficacy of these purchases of pre-existing dwellings that should be the focus of the Government’s investigation, specifically:

  • Whether it is appropriate for temporary residents to purchase pre-existing dwellings? What is the rationale behind this policy, given they are not citizens or permanent residents?
  • Are the rules requiring temporary residents to sell their property when they leave the country being adequately enforced?

Personally, I would like to see foreign purchases restricted to newly constructed dwellings only (no exceptions), and a copy of an Australian passport or proof of permanent residency required for transfer of title for all existing dwellings.

It would also be nice to see the Government follow up this inquiry into foreign ownership with a sweeping review of negative gearing and supply-side constraints, which are far more to blame for Australia’s unaffordable housing.

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Unconventional Economist

Comments

  1. Well, if ACBC are squealing, this review seems to have merit and affect their members.

    I wait with trepidation to see who else squeals and thereby reveals themselves as having a vested interest or represents a vested interest.

      • Almost everyone talks their own book, including me, much of the time, but not always.

        Government and other decision makers and evaluators of policy have the job of searching for the overall picture by taking into account all the competing submissions, including those of the not for profit and civic organisations.

        unfortunately Abbott is gutting the funding of organsiastions like the Drug and Alcohol research organisation and the Environmental Defenders Officeto avoid well researched civic input, challenges and protests.

  2. Sales of new apartments and housing should in theory be a good thing – keep builders, business busy etc.

    The only fly in that ointment is the NIMBY and BANANA and FUPA (first users pays all) triple play that results in a constipated supply of new land and land approved for redevelopment.

    The effect of the triple play is that the extra demand from foreign buyers feeds into rising prices and speculation on capital gains not yield.

    There is not much evidence I am aware of that suggests that foreign buyers are buying to reap rental yield. Investing for capital gains is simply worsening the instability of the market.

    Prices remaining stable while supply rises is an indicator that the offshore investment is not doing too much harm – prices slowly falling as supply rises would be the best result.

    That does not appear to be the situation at present.

    • +1

      However a increase in supply will be meaningless if developers are only interested exclusively in selling to foreign investors and just drive their business models to capture this target market further. This will just encourage foreign developers to cash in on the action and not even use Australian workers but bring in others on 457 visas.

      In the end we have activity occurring in our cities dividing it up for exclusive consumption by non-Australians and disadvantaging the Australian people further.

      • Yep,

        If the market for housing was not dysfunctional there would be little or no interest from foreign buyers.

        Holding an illiquid asset in a foreign jurisdiction with a lot of aggravation (tenants) to earn your rental yield is not attractive to most investors.

        The fact that there is so much interest from foreign buyers is a big fat yellow canary.

        Fix the distortions on the supply and demand side and the foreign interest will evaporate.

    • I’m with you on this one Pf.
      If politicians want to fix anything they should fix the constipated supply system.
      I find it amazing that everyone accepts that OUR iron ore, OUR collective resource treasure gets shipped off to China at rates of over 600M tonnes per year, thats probably more IO than has been used in Australia since federation yet in Aussie Parlance “it’s all good”

      Now let just one of those yellow creatures buy on my street or dare to outbid me at an auction and there’ll be hell to pay. I’ll let you in on a secret they have lots of our money because we think it’s cute to run a chronic CAD. So at some time post 2008 GFC Chinese people decided they weren’t happy owning the mortgage they wanted the property deeds in their own name. Who can blame them given the financial debasement of the FED’s and ECB’s never ending QE’s .

      However this is all irrelvant because the solution is so simple:
      create more housing stock
      AND
      raise land taxes
      AND
      Tax fully ALL capital gains

      Implement these 3 changes and you’ll be happy every time a foreigner buys because they’ll be indirectly supporting Aussies.

      • dumb_non_economist

        CB,

        Are you crying racism? As to being outbid at auction why shouldn’t anyone thus be pissed? I don’t give a shit where foreign buyers are from, they shouldn’t be allowed to buy existing property full-stop.

        The large bulk of property owners who support foreign buyers most likely didn’t have to compete against foreign buyers and now face a financial windfall at the expense of buyers.

      • +1. The average Australian doesn’t have a pool of a few hundred million Chinese workers that work for $2 an hour to exploit making what is mostly flaky, brittle garbage.

        It’s flat out treason.

        Sure we could open up the land, but you’d have to build a tonne of transport infrastructure, we’re pretty much at gridlock as it is in Sydney.

      • Me racist….that’s priceless.

        WHY do you see a difference between Chinese buying our Aussie IO and shipping it back to China Vs Chinese buying Sydney Houses/Apartments and leaving them in Australia?

        Surely if there is any morality arguments they should start with LAZY Aussies running a never ending CAD are surprised when their Chinese banker stops accepting IOU’s and starts wanting hard assets (like real estate).
        FIX CAD and you fix the source of this recycled Chinese wealth, that’s something Australia can do with no help from anyone.

        Alternatively JUST BUILD MORE HOUSES, Aussie builders Chinese Buyers whats not to love about that!

      • dumb_non_economist

        CB,

        I didn’t say you were racist, I asked if you were playing the racism card! As to their buying our houses for our exporting IO, well no one forces them to, if they can source it elsewhere I sure they would. I doubt their buying our housing has anything to do with our IOUs, this buying is on a personal level.

      • Others might hesitate to call you racist China-Bob, but I won’t. It’s racism to refer to Chinese people as ‘yellow creatures’. It is intentionally derogatory and completely out of order. I am appalled that the moderators let it stand.

    • You said it, Pfh007. Foreign investment is ONLY a problem because of the dysfunctional system of land supply for housing.

      • Phil, I’m thinking more in line with explorer’s comment, we have a small population, so the rest of the world have the potential to swamp even the strongest supply response we could make, not to mention they can price us out of all the good locations in our own cities. So I’m in favor of fairly strong restrictions on foreign investment in our residential real estate.

    • The concern about foreign investment does not seem to recognise the diversification impact of investment decisions all over the world, some of which are driven by political fear as much as portfolio construction. We also make international diversification decisions at the corporate, institutional and personal levels and invest in overseas markets and assets.

      Capital preservation in the face of political uncertainty coupled with economic uncertainty is as much if not more a motivator for some inbound foreign investment.

      We also fail to recognise the problem of our tiny size compared to the size now of the middle classes in SE Asia including Indonesia and China as well as Japan.

      With say 1.6 billion population and 5% in the equivalent financial position of the adult working Australian middle class of say 25% we are talking about 80 million who may invest in Australia (perhaps as a holiday or student home) compared to 6 million Australian potential investors.

      Maximising the prices foreigners pay for their investments in Australia is sound business sense, maybe we just really restrict them to new builds and we keep existing stock for Australians only and provide a FHB grant to help get people on the “ladder”.

  3. Well said UE.
    100% agree – new property only, with dwellings left unoccupied pinged an extra Council Levy.
    What any Inquiry won’t find is the underground network of local buyers channeling undeclared foreign investor funds into existing property. The damage is now obvious – 52% of recent sales to investors.
    Time for govt to bring out the stick of penalties rather than carrots of tax breaks for speculation.
    Seize a few properties as proceeds of crime under FIRB/Austrac Legislation, that’ll work.
    Two questions:
    1. Why is the govt so bent on financialising shelter?
    2. Why the desire to import China’s inflation when they are clamping down on speculation?
    Our govt seem prepared to not only mandate a speculator-friendly tax system, facilitate a hands-off approach to reckless lending, deliberately stymie land releases, but then happy to put the boot into local buyers, all in order to appease foreign speculators and inflate their own RE portfolios?
    Recommendations:
    1. New build sales only to foreign investors;
    2. Additional Land Tax for unoccupied dwellings;
    3. No CGT exemption or discount for Temp visa holders who sell up and leave (they benefited from RE inflation, they can pay some tax)
    4. Tighten Austrac & FIRB regulations such that monies transferred into Aus with purpose of circumventing FIRB home ownership rules can be seized as proceeds of crime (should that not already be the case)
    Chodley Wontok – When Fiction met FIRB http://www.macrobusiness.com.au/2013/03/firbs-foreign-property-buyer-fail/

    • [4] And the receiver of funds would also need to be pinged (criminally) if the funds are used for illegal activity – i.e. purchasing existing dwellings, etc.

  4. There are so many investors right around the world who regret the day they ever invested in overseas property. They have become tax payers without representation. I have a mate who bought in Florida 6 years ago, he paid $490k, his property taxes have increased to $9k a year. Each year the same story with his rates notice, ” due to unfunded pension liabilities”.
    In a way all these investors are potentially increasing our tax base and that is why nothing will be done. More fool them I say.

    • No doubt there would be a lot fewer off shore sales in Australia if the local council was pocketing $10K per year for every empty 2 bedder sold.

    • Given anxiety about our declining tax base it seems like a lay down misere that opportunistic taxation of foreign investors will come to pass – they’re non voters who can be highly taxed! A politicians wet dream. Just got to fatten them a bit before the slaughter, I would have thought.

      • Exactly! Maybe then we can have a reasonable FHBG ($250k) paid for from a deserving contributor.

      • It will be like shooting fish in a barrel. Just got to get the fish in. As it is only a trick you pull once.

      • It might sound like a good idea to sell parts of Australia to foreigners and then change the rules to rip them off.

        One problem is the question of morality. Do you want to be the sort of person who does this? Do you want to be trusted in future?

        Then there is the question of foreign response. What if an Indonesian helicopter armada flies in to protect “their” farmland? What about if a Chinese battleship sails in to Melbourne Harbour 🙂 to protect “their” ghost city?

      • Claw,

        I am ambivalent about your concerns, at least in part because I don’t think that there is anything like a plan to rip people off. Rather, I think that a plausible (but not necessarily likely) outcome of a boom in investment in Australian property is that an opportunistic law maker discovers an existing sizeable flow of taxes on foreign-owned properties, and realises they can hike those taxes without any repercussion at the ballot box, and that for the politician who makes that connection, the temptation will be very strong.
        Military repercussions seem highly unlikely for basically an administrative matter – it seems far more likely that if a politician raises the taxes too much, they will kill the golden goose by triggering a mass sell-off. If there is a government response, there will first be protracted diplomacy, and the ensuing negative publicity would itself be a deterrent to future investment.

  5. Use of the above FIRB table 2.8 must come with the caveat that it represents only those foreign buyers that have voluntarily self-reported to the FIRB. The actual numbers of foreign buyers may well be much higher. We simply do not know.

    Independent compliance audit of most recent 1000 sales of existing dwellings in Syd and Mel required now.

    • Yes, I am not aware of any point in the process of buying a property where the status of the purchaser is subject to any check.

      Nor have I heard of any case where the FIRB has acted in relation to

      1. A residential property bought by a foreign buyer without approval

      2. A residential property not sold by a temporary resident on departure.

      Happy to stand corrected on this.

  6. Given the announcement that Foreign Investment will be looked into, it may be interesting to see what happens to property over the next few…. however long it takes for the Government to get its act together? Possibility for people to get in while there is still a chance?

  7. Is scarce Australian residential land best sold to younger Australians who have attended compulsory Australian schools, worked in Australia complying with Australian safety and environmental regulations and paid Australian income taxes and paid Australian charges for transports, utilities, etc

    OR

    Is Australian residential land best sold to people who grew up in other countries and have acquired more money than aforementioned young Australians via means that do not involve Australian education, rule following, and tax and charge paying?

    I’m talking foreign buyers, skilled immigrants, refugee immigrants and *.* visa immigrants.

    • Depends on who you ask:
      Local working class – option A – locals;
      FIRE proponents/Laberals/vested interests – option B – foreign buyers

    • Definitely A.

      With B, was the foreign money earnt by means that would be legal in Australia?

    • Here’s a policy solution. Abolish growth constraint boundaries and instead issue every young Australian, when they turn 20, a license to develop 1/4 acre of greenfields land. Land vendors have to buy up these licenses before they can sell the resulting parcels of land to developers. The resulting market that gets created would be interesting. Young people would regard the sale of their development credit as their means of obtaining at least a deposit on their first home.

      • That’s an interesting idea.

        That way any windfall profit from rezoning is shared between young local and land seller.

  8. The amount of foreign buyer activity in certain parts of Melbourne and Sydney (from what I have read, Chatswood ect) is massive

    The house next to me, the one two doors up and the one across the road have all been bought by foreign buyers, they were then fenced off within weeks and a McMansion went/is going up, the two that have been completed have been empty for over six months

    Had to speak to my new neighbour regarding our fence, was advised he is in China, not contactable

    These are one type of foreign investor

    The other approached my wives father to buy property for him in the Glen Waverley school zone, he was told to find something “good” on a big block and spend up to $1.5 million, my wives father kindly rejected the proposal, but who knows how much of this is going on

    Finally, a friend of mine (was a temporary resident here), has returned to the Mainland. She bought two homes in Glen Waverley. I asked after she bought these properties what contact she had with the FIRB, she looked blankly at me, her properties are being rented out and she isn’t sure when or if she will return

    Not sure what we are achieving by allowing foreign investors and temporary residents to buy existing dwellings apart from pricing out local families

    • Not sure what we are achieving by allowing foreign investors and temporary residents to buy existing dwellings apart from pricing out local families

      I don’t think it has been discussed or explained.

      • I did, had my friend Chodley Wontok e-mail the FIRB

        The responsed by saying he was approved to buy $245 million worth of farmland in Western NSW

      • Nice work. We all need to make sure illegal activity is stamped out in all aspects of our society.

        With the FIRB response, are you saying that they believe that approval for farmland in Western NSW also covers approval for multiple (existing) residential homes in Glen Waverley?

      • It wasn’t clear Andy, Briony from the FIRB just said you have been approved to buy $245 million of farmland in W NSW and to buy any ports you desire

        Apparently we are selling ports off too.. from the ABC news article

        “Chinese purchase of WA farmland divides opinions
        China’s biggest state-owned agricultural conglomerate has bought farmland and port facilities in Western Australia and the move has sharply divided responses.

        In the latest example China’s biggest State owned agricultural conglomerate has for the first time invested in the Australian market, buying up vast tracks of farmland in Western Australia as well as port facilities to ship its grain out of the country.

        Beidahuang through its new Australian subsidiary Heilongjiang Agriculture, hasn’t just bought the farm. It’s also purchased port facilities at nearby Albany to vertically integrate its operations. This creates its own paddock to plate supply chain from WA to northern China.”

    • You guys are way too gloomy.
      If most houses are eventually sold to overseas investors who neither live in them or rent them out, priced out current residents will move on to somewhere else (for example, if it wasn’t before, I imagine property in Morwell has become a lot more affordable recently).
      The population in the capital cities being substantially lower, traffic conditions will improve, childcare waiting lists will shrink, and Melbourne and Sydney’s schools and hospitals will have enough capacity to provide truly world class service quality.

  9. Stupid question but what are the foreign investment rules?

    The FIRB site reads like it’s just a notification or are there restrictions on holding property too?

    Also what is a likely outcome of a report? House hunting at the moment (I don’t want to hear your thoughts please, I just want a place to live and not waiting for the crash), I’m thinking of chatting up some Chinese buyers to screw them!

  10. I disagree with the requirement of passport or PR status.

    A person who is normally resident in Australia for tax purposes should be allowed to purchase any property they wish as a primary place of residence only. A non resident should be restricted.

    However I must add that I think this inquiry skirts dangerously close to a “We grew here, you flew here attitude”. House prices were out of control long before this latest episode of increases being attributed to foreigners.

    • skirts dangerously close to a “We grew here, you flew here attitude”

      You should explain that attitude more. Is it a good attitude? Also what is the danger you refer to?

      My opinion is that people who grew here should be looked after before any people are invited to fly in here.

      On the other hand if those who fly in are to be treated like royalty ahead of locals, I would like you to tell me where I can fly to obtain that royal treatment myself.

    • “A non-resident should be restricted”

      What is stopping a non-resident buying an existing dwelling?

      The rules in relation to foreign purchasers of established dwellings enjoy bipartisan support and exist for sound policy reasons….amongst other things to ensure adequate new housing supply.

      The inquiry is to examine the compliance with the existing rules.

      The requirement of the purchasers passport/visa status is a simple and effective compliance step that I am astonished does not already exist.

      • At what point in the sale of an existing dwelling are the purchaser’s tax records “checked”?

      • The point was raised in the article that all purchasers should be subject to a passport or pr check.

        The point I put forward was that residency for tax purposes should be the purchasing requirement. A tfn can easily be cross referenced against a property at the close of each tax year.

      • I am a non-resident non-tax payer, how does your process prevent me from buying an existing dwelling?

      • I am also a non resident tax payer – so as you would know our taxes are minimalised and you pay full tax in the jurisdiction in which you are resident.

        I never proposed a process, however if you want one

        * all property transactions require at least one tfn
        * if the tfn for the prior tax year is non resident then no purchase is allowed without proof that the purchaser has in fact returned to Australia and is now a resident.
        * if in any given year the tfn appears as non resident then the intended length of stay outside Australia should be noted, perhaps periods of less than 5 Years can be permitted, permanent emigration or periods over 5 years would require a sale.

        No one could seriously argue a person living, working and paying taxes in Australia for a period of years, who happens to not be a citizen or on pr (any kiwis around?) would be contributing less to the economy or indeed the country and therefore less deserving the right to buy property than some Aussie expat who has been in London or Hong Kong for 10 years.

        However I would add that I find all this is a red herring and the real issue remains supply and tax incentive, both of which should be included in the review proposed.

  11. This…

    http://theage.domain.com.au/real-estate-news/toorak-mansion-sale-tops-big-auction-weekend-20140317-34xux.html

    “RT Edgar’s Paul Pfeiffer refused to disclose any information about the sale, though the Chinese buyer is believed to be a local upgrader.” – BS!!

    “However, he said he’s noticing plenty of buyers from mainland China looking at upper-end properties.”

    ‘‘Particularly for properties priced over $5 million,’’ Mr Pfeiffer said.

    Looks like RT Edgar don’t even know the FIRB ‘rules’.

    Also love how Domain/TheAge have disabled comments for real estate articles since late last year.
    All of it is so farcical.

    • Perhaps agents are complicit in the illegal transaction? That would make them a criminal in the legal sense of the word. Any budding lawyers out there interested in making a great name for themselves?

  12. The best quote, not quoted, from Kelly O’Dwyer is – “We know that the great Australian dream is to own your own home. We know that that’s pretty difficult with two incomes and lots of years of savings and a large mortgage so we want to make sure that we are not making it more difficult.”

    Has a review of ALL Tax Concessions, Tax Deduction, Tax Subsidies and other related Tax Perks and Rorts related to speculative investment in Australian Property ever had a better lead in and justification.

    They know buying a home is difficult and they want to make sure they are not making it more difficult.

    Get rid of Negative Gearing and All related speculative investment Government sponsored incentives that both reduce Australia’s Tax Revenue and Increase Real Estate Prices to a far greater extent then Foreign Investors.

  13. Your article has a startling number of contradictions and assumptions. Here are two:

    Contradiction: “First of all, focusing only on Chinese investment is a mistake. Overall foreign purchases of Australian real estate is the issue”
    In that case the title of your article should have been “Are Foreign property concerns “overblown?” and NOT
    “Are Chinese property concerns “overblown?” Dog whistling?

    Assumption:
    “Second, most people (me included) are not particularly concerned about foreigners purchasing off-the-plan properties, since they at least add to supply (to the extent that they are not kept vacant). Moreover, the construction of such dwellings also provides economic activity and jobs, and is a form of export.

    Rather, the concern about foreign purchases relates to the purchase of pre-existing dwellings, which do not add to supply or economic activity, and simply put upward pressure on house prices (at the expense of younger locals).”
    How can you be sure that the foreign (I think you meant Chinese purchase of pre-existing dwellings does not add to supply? Do you assume people who sell existing dwellings will not be buying off-the-plan properties? You may think that is common sense but is a conjecture nevertheless.

    • “Buyer’s agent Shane Clinton of Buying Houses Australia says overseas buyers often side-step requirements that they only buy new property by purchasing established dwellings in the name of already established family members”

      That’s exactly what I’ve been seeing in Melb – in a huge way.

      • So we have an Australian ‘Buyers Agent’ who openly admits that foreign nationals are getting around our regulations and is probably complicit in the act.

        This gets reported in the media as if nothing is wrong?

        Surely there is someone that we can report this leech to?

    • Like I was competing with the Chinese for $1 million plus properties. So it is mainly the rich that are whinging then. Serve them right.

  14. And we have this little corker today:

    http://smh.domain.com.au/real-estate-news/do-chinese-buyers-like-your-neighbourhood-20140318-34z6z.html

    Simon Henry, co-chief executive of Juwai.com said investment, education and a prestige lifestyle were the biggest drawcards for China’s house hunters, rather than emigration. “Buyers who intend to become permanent residents to Australia are a smaller, but still important group,” Mr Henry said.

    Buyer’s agent Shane Clinton of Buying Houses Australia says overseas buyers often side-step requirements that they only buy new property by purchasing established dwellings in the name of already established family members.

    “The significant investor visa has taken a while to get traction, it’s building now, but it means that to date 99 per cent of my clients have been buying outside the recommended visa guidelines,” he said.

    In Mosman, where more than 30 per cent of prestige sales last year were to buyers from China, McGrath agent Michael Coombs said of the eight sales he made to Chinese buyers in the past six months, three were to visa holders and five were purchased in the names of a family member.

    Its as we keep saying, Chinese buyers are bypassing FIRB and purchasing through existing relatives. The chest thumping and posturing by vested interests saying they are only allowed to purchase new homes etc and their level of buying is small is just pure fairyland stuff.

    Yes the amount of transactions is small in Mosman, and this is Mosman, but it shows that sales are not black and white like the FIRB and other property spruikers keep claiming. This behaviour will be exactly the same whether it is in Mosman or Parramatta.

  15. Royal Commission time

    Intention: activate a Royal Commission into all facets of RE industry
    Possible evidence:
    “Buyer’s agent . . . says overseas buyers often side-step requirements that they only buy new property by purchasing established dwellings in the name of already established family members.”
    Targets mentioned in article: Buying Houses Australia
    Source: http://smh.domain.com.au/real-estate-news/do-chinese-buyers-like-your-neighbourhood-20140318-34z6z.html
    Thanks Powermonger

  16. I understand that PRC Chinese Citizens can only Legally export/send O/S a Maximum of $50K per year. If Mum, Dad and their single child all send $50K a year it would take them 20 years to transfer $3.0 Million to Australia to buy property.

    The PRC Government knows this, the Australian Government should be aware of it and the REA Industry involved in promoting and selling Australian Real Estate to Mainland PRC Buyers would certainly be aware of it.

    And yet hundreds if not thousands of Australian Properties have been sold to PRC Mainland Chinese who seem to arrive with Millions in Foreign Currencies to buy property.

    The money is clearly here Illegally and yet nobody gives a brass razoo. FIRB doesn’t even bother to ask apparently and you would think that they should be aware of the PRC Foreign Currency Regulations.

    Australian Real Estate is being used to Launder Illegally Exported Foreign Currency out of the PRC.

    Where the money came from in the first place is a whole other issue. Some I would agree has been hard earned totally legally in the PRC, the rest has come from “The State” via a myriad of different and Illegal means.

    However regardless of its source it has all been exported Illegally and Laundered through Australian Real Estate.

    Really doesn’t matter if it is new or used the properties are being bought, largely with PRC “funny money”.

    “Regarding the latter, citizens are allowed to send $50,000 a year out of China for “current account transactions” such as tourism, but not for “capital account transactions” like most types of investment.”

    http://www.chinalawblog.com/2012/07/on-getting-paid-from-china-is-there-really-a-50000-yearly-limit.html

    http://thediplomat.com/2013/04/china-and-capital-outflow-reform/