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Chinese property investment coo...

Chinese property investment cooling at last

Chinese investors have been the big spenders in Australia for some time. In fact, so fervent has been their demand for Australian property, that many people have blamed the influx for the fast rise in prices over the last few years. 

However, it appears that demand is starting to level out at long last, with Chinese investors now dropping slightly in the market, which could help to improve its longevity and long-term health. 

Analysts from investment bank Credit Suisse said in a report this week that they had been party to anecdotal evidence that appeared to show Chinese investors in Australian property could fall by as much as 30 per cent in the year to the end of December. 

Credit Suisse analysts Damien Boey and Hasan Tevfik said based on limited data, the “weight of evidence suggests that at the very least, there has been some cooling of Chinese interest in recent times, off an historically high level”.

“Even we have been surprised by the recent increase in Chinese demand for Australian housing,” they wrote. “After such a strong pull-forward of demand, we could now be seeing some consolidation.

They said that the fall was largely down to the "cyclical weakness" in the Chinese economy and levels of wealth in the nation. The fact that demand is falling from an all-time peak means that it is not seen as a negative as it would be at other times. 

Tony Crabb, head of research at real estate and research firm Savills Australia, also added that it's not entirely surprising that there has been a fall in demand, because it's part of the natural ebb and flow of the sector. He believes that in the future as conditions change once again, we will see the volume of Chinese buyers in Australia start to rise again. 

All information provided is of a general nature only and does not take into account your personal financial circumstances or objectives. Before making a decision on the basis of this material, you need to consider, with or without the assistance of a financial adviser, whether the material is appropriate in light of your individual needs and circumstances. This information does not constitute a recommendation to invest in or take out any of the products or services provided by SMATS Services (Australia) Pty Ltd or Australasian Taxation Services Pty Ltd.

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