Australian property market to feel effects of Chinese restrictions

Australian property market to feel effects of Chinese restrictions

The recent crackdown on international property investment in China is predicted to have a knock-on effect on the Australian property market too.

As the Chinese government increases restrictions on foreign property purchases, the Australian property market may also witness lower investor numbers – especially during the next six months.

“While the situation will be complicated by the ongoing back-and-forth battle between the Chinese government and investors, the most likely scenario will be a slowdown in incoming cash flow [into Australia] for the first half of 2017,” commented CT Johnson, general manager for Basis Point (a business intelligence agency).

Prices set to rise in Singapore

However, while the Australian Foreign Investment Review Board released a report claiming foreign buyers had “no appreciable impact on price increases in the Australian property market”, Johnson claimed that its methodology was unclear – therefore making it tough to work out how they reached that result.

“No one has put together a good analysis of the impact of Chinese buyers on the Australian market,” he said. “At the end of the day, there are a lot of people who want to buy into Australia, particularly into the capital markets – Melbourne, Sydney and Brisbane particularly – so there will be a lot of demand there,” he said.

“What I expect is that it [Chinese restrictions] will drag down the rate of increase in housing prices in Australia. I believe that there will be more pressure on high density, off-the-plan buildings. I expect to see zero impact on the other end of the scale – land and house type developments.”

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