Any Australian-Chinese property market certainties are off after stockmarket rout

Any Australian-Chinese property market certainties are off after stockmarket rout
Any Australian-Chinese property market certainties are off after stockmarket rout

Will fresh Chinese property buyers still come to Australia?

Will existing off the plan contracts settle?

What decisions will the Chinese government make on fund transfers, with its formidable capaclty to control many aspects of its economy.

Will all Chinese developers proceed with their overpaid site projects?

Any Australian property market Chinese certainties are now off after the recent stockmarket rout. 

Blogger Pete Wargent recently uploaded a 25 year chart for the Shanghai Composite, indicating just how explosive the stock bubble had become in China. 

He noted that he make no pretensions of having special or unique insights into China's stock market craziness.

And I suspect no-one really knows all the likely property outcomes for Australia. 

We are all interested observers. About 8% of Chinese wealth is held by the 1.4 billion Chinese in their stockmarket - often considered punting money. Financial services company GaveKal said in a recent report the pain of the crash is affecting probably no more than 20 million to 30 million Chinese households, most of which range from upper middle class to very wealthy.

 

The turmoil on the Chinese sharemarket raises concerns, challenges and opportunities for Australian real estate, Robert Harley wisely concluded in today's Australian Financial Review.

China has been the single-largest source of offshore real estate investment here, with $12.4 billion of Foreign Investment Review Board approvals in 2014-15, and has been rising and spreading fast.

No one depends more than Australia's billionaire apartment developer, Meriton's Harry Triguboff who told Harley:

"At this stage, we don't feel anything has changed. With the dollar coming down, they want our apartments even more."

Most current commentary suggests Chinese sharemarket turmoil will prompt the Chinese away from stocks to other asset classes, especially real estate. But I'd expect a few non-cyclical curve-balls.

 

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

Tags: 
China Investment

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