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).
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.”
