Ruh roh. Wake up Australian media – time to smell the Chinese roses. Its obvious as the nose on your faces that Chinese capital flight is being clenched throughout the region, particularly given the PBOC one-two punch to the offshore Yuan fix yesterday.
AMP are waking up slowly to the fact that Australian property is the next to feel the squeeze. Via the AFR:
When Chinese markets dived in July and August last year, developers and property agents said the volatility would drive more capital out of China and into Australia, particularly into property.
But this time around, the 7 per cent plunge on January 4 and a similar after shock on January 7, could see Beijing clamp down harder on the flight of capital, limiting Chinese ability to buy properties overseas.
AMP’s Shane Oliver: “The dent could be longer lasting and there’s a bit more to come and more impact on property. “
Credit Suisse analyst Hasan Tevfik is punting that a slowdown in capital could impact demand of Australian property in the short term, for six to 12 months.
Chinese demand aside, the property market could also benefit from a surge in local demand, property agent LJ Hooker said.
“Over the last quarter data has shown that investors have been moving away from real estate, due to higher interest rates thanks to additional lending regulations from APRA,” National Research Manager Mathew Tiller said.
“However investors will begin to reconsider property…the current share market instability will have a lot of investors looking for a safer and less volatile investment and real estate markets will benefit from this.”
Riiighht.