From Gotti today on the tightening China property bid:
Sydney’s largest apartment developer and owner, Harry Triguboff, got wind that his main apartment buyers — Asian investors are about three quarters of his market — might find the going a bit tougher. In any area of business, when you gain a whiff of a change in your market you have to take action before your rivals.
…Given the clamps being placed on money flowing out of China, the actual Chinese ability to buy dwellings in Australia is shrinking, which means Meriton has lifted market share. There are a lot of developers in Sydney who are building apartments that are now going to struggle.
In Melbourne, one player does not dominate the market as in Sydney, but the contraction of the Chinese pie will hit those developers who are over-extended — particularly if China tightens further. And in Melbourne the rate of CBD apartment building funded by the Chinese is much greater than in Sydney.
This will get worse not better. China is fighting an epic battle to prevent a collapse in its currency that would cause a discontinuity in its growth. They will do whatever it takes to prevent capital flight getting out of hand including shooting Chinese Australian property investors (figuratively speaking, most likely).
What is good for China these days is terrible for Straya.
