Is Chinese capital easing Sydney house price falls?

Friday, 23 March 2018

Here’s the chart:

I’ve mulled whether the bank’s rorting APRA affordability measures is behind the stabilisation. But there is another possible factor. Late last year, China adjusted its capital controls for some corporates. Yuan outflows spiked immediately, chart from Damien Boey at CS:

There is a pretty good correlation between Chinese capital outflow and Sydney/Melbourne house prices. It’s possible Australian realty saw some of the late 2017 dough early this year.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.