How China’s Risk Crackdown Will Hit Manhattan’s Property Market

  • Morgan Stanley sees 84% drop in China overseas property buying
  • Office properties particularly vulnerable as controls deter

The Waldorf Astoria hotel in New York.

Photographer: Spencer Platt/Getty Images

China’s crusade against capital outflows and leverage has ensnared some of the nation’s largest property investors, including Anbang Insurance Group Co. -- the owner of New York’s iconic Waldorf Astoria hotel.

The crackdown is rippling across the world, and will likely spur an 84 percent slump in Chinese overseas property investment this year, and a further 18 percent drop in 2018, according to a report from Morgan Stanley. The most vulnerable real-estate markets are those in the U.S., U.K., Hong Kong and Australia, with office properties the most exposed, analysts including economist Robin Xing wrote.

Manhattan is a particular worry, with about 30 percent of transactions in the borough that’s home to Wall Street involving Chinese parties in 2017. In Australia, China is the largest foreign real estate investor, accounting for as much as 25 percent of office property transactions in the last two to three years, according to Morgan Stanley.

— With assistance by Emma O'Brien, and Eric Lam

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