China continues to crackdown on capital outflows but the true impact of the government’s actions is now being felt in some of the world’s most popular property markets. From London to California and even to Australia, agents are seeing less interest from Chinese buyers. This won’t totally cool Chinese demand for property, but some experts claim it will deterring first-time buyers who lack offshore assets and the expertise to skirt tighter capital controls.
In Silicon Valley, Keller Williams Realty tells Bloomberg that inquiries from China have slumped since the start of the year. This news comes less than a month after the Chinese government unveiled fresh curbs on overseas payments as it looks to clamp down on what some of claimed to be world’s biggest real estate buying spree.
The Spire in London is scheduled to become the tallest residential tower in Western Europe when completed but the 67-story tower has issues with the Chinese buyers who signed contract late last year. The new rules hampered the efforts of some buyers were caught off guard by the regulations that made it harder to get capital out of China. Less than 70 per cent of clients who signed purchase contracts in have made their initial payments, reports Bloomberg who cites a conversation with a press official at Greenland Holdings Corp., the project’s Shanghai-based developer.
In Australia, the restrictions are likely to cause a notable reduction in Chinese purchases of Australian property, says CT Johnson of Basis Point, a consulting firm that specializes in Chinese-Australian business relations. Australia approved AUD 24 billion of real estate investments from China during the fiscal year that ended in June of 2015. That made China the biggest source of foreign buyers in Australia by a wide margin.
Even with the tightened capital controls in place, it wouldn’t completely stop Chinese buyers from gobbling up overseas property. Some brokers say motivated Chinese investors have no issues finding ways around them with a number of investors already having money in offshore accounts.
