ABC’s The Business ran an interesting segment last night looking at the bank clampdown on Chinese apartment buyers, which has raised default risks as thousands of off-the-plan apartments are completed over coming months.
According to the report, only 20% of Chinese buyers of Australian apartments actually visit the country to look before deciding to purchase.
Most Chinese buyers get finance by Aussie banks because they don’t want the Communist Party to know what they are doing.
But the tougher new financing rules on foreign buyers, combined with newly introduced stamp duty rules, have dampened demand and precluded buyers from obtaining bank finance over the past quarter; although private lenders charging much higher interest rates have filled some of the gaps.
But with lots of supply still to come online, mortgage broker Marshall Condon warns that many Chinese buyers may break their contracts: “there’s probably 50% that are a bit of a concern”.
Full video above.