China cash supply for Australian property the 2016 mystery

China cash supply for Australian property the 2016 mystery
China cash supply for Australian property the 2016 mystery

Chinese buyers have helped drive huge price rises in Australia's property market, but the BBC reports Beijing is now trying to prevent its citizens from taking cash out of the country.

Reporter Julian Lorkin noted according to Chinese law, individuals can take a maximum of $50,000 (A$69,800; £35,000) out of the country.

"Chinese banks that once looked away when investors transferred money to outside China are now scrupulously applying rules about the transfer of capital overseas.

"This means fewer Chinese buyers can get enough money out of the country to buy expensive Australian real estate," the BBC said. 

Last year Chinese buyers spent a record A$12 billion on Australian property, with Dr Andrew Wilson, Domain's senior economist, saying China had been a very significant part of the market for the past few years, particularly for high rise apartments in Sydney.

Tim Lawless, from real estate analysts Corelogic, said many Chinese investors had brought money to Australia already, as they had planned to buy property there for several years.

Families could also team up to circumvent the US$50,000 foreign investment limit.

"That will sustain the property market," Mr Lawless said. "Chinese who have cash here are still interested in Australian property.

"However, they are looking for areas that might still have growth, like Melbourne or the Gold Coast. Sydney is past its peak, but prices haven't fallen off a cliff. "

Dr Wilson noted Chinese buyers were still active in Melbourne.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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