Chinese Investors Keep Pouring Money Into Australian HousingBy
Property-hungry Chinese investors have shrugged off the impact of tighter capital controls and continue to pour money into Australian housing.
Foreign buyers are acquiring about a quarter of new housing supply in New South Wales, and China accounts for about 90 percent of that demand, according to Credit Suisse Group AG analysis of tax office data. Foreigners are buying 17 percent of new housing in Victoria, and 8 percent in Queensland, Credit Suisse said.
While local property agents say higher state taxes on foreigners are deterring buyers, Credit Suisse isn’t so sure they will have a big impact on prices. They point to even-higher taxes in other global cities, the relative cheapness of Australian property compared to Chinese cities, and the growing stock of wealth in China.
“Local incomes are becoming less relevant in determining the outlook for house prices and regional wealth is becoming more relevant,’’ Credit Suisse analysts Hasan Tevfik and Peter Liu said in the report. “We see no evidence of a slowdown in foreign demand because of the stronger capital controls introduced by Chinese authorities.”
That’s not good news for locals already struggling to break into the booming housing market.