Australian real estate and Chinese investors…the moment of truth

Posted: September 16, 2015 in Uncategorized

It is a few years that there is a debate if the Chinese are snapping the majority of Australian city real estate or not.

The moment of truth is closer then ever!

All goes back to the in-famous devaluation of the Chinese Yuan.

From Reserve Banks fonts I found out that part of the motivation of the devaluation was to bring back Yuan to China without making the Yuan rise.

This is consistent with the idea of China wanting to stop the capital fleeing overseas.

China usually tolerated this. There always been a USD $50,000 limit, but it was easy to circumvent.

One easy way is that friend and family were used to move each $50,000 overseas and the real buyer was paying back the amount.

Now China is tracking overseas accounts that receive more than USD $200,000 within 90 days.

Naturally there are other ways, but when the Chinese authority decide something it is prudent to obey.

Corelogic data RP data already declared that last weekend Sydney market auction results was the lowest for the year and even Melbourne had two weekend with below average data. It is still 75% so nothing to worry yet, we need to monitor the next few months to see if it is really the Chinese propping up the market or not.

Hopefully not as if we have a commodities and real estate bust at the same time, Australia would not be that lucky.


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