The chief economist for the REA Group, Nerida Conisbee, has given an interview in News.com.au, whereby she claim that Chinese investors have fled the Australian property market:
“We are now looking at a very different property market to what it was like during the boom,” realestate.com.au chief economist Nerida Conisbee said.
She said investor lending is unlikely to get back to where it was any time soon.
“Buyers from Asia, a key market for new development, have dropped dramatically,” Ms Conisbee said.
“Over the past 12 months alone, property seekers from China have dropped by over 60 per cent to the lowest level we have ever recorded.
“And confidence in the new apartment sector is low following some high-profile structural issues.”
While there is little firm data on foreign investors, what does exist – the Westpac Survey – does confirm that buyer demand has collapsed:
And this evaporation of demand helped drive the decline in Sydney and Melbourne dwelling values, where Chinese investment was most concentrated:
We don’t see Chinese property demand returning anytime soon. China tightened its capital account in a bid to prop up the value of its currency:
And these capital account restrictions are only likely to intensify as China loses the trade war, forcing it to stoke domestic demand with lower interest rates, triggering further yuan pressures:
This means that more Chinese individuals and businesses will struggle to get money out of China and may, in fact, be forced to repatriate it.