The real estate industry will see some fluctuation, but this won’t stop Chinese developers who are still seeking to expand in Australia.
To protect the volatile share market, tougher controls are going to be put on Chinese outbound investment and limit the amount of spending leaving the country. Despite this, Chinese investors still remain optimistic about growth in Australia.
Greenland Group, China Poly Group, Country Garden and Starryland Australia are among those top developer players that may be affected.
Greenland Australia’s Assistant Managing Director, Kang Xue, disagrees that the market will slow down.
“There are hot spots and cold spots and the overall market we think is stable. Especially in Sydney we don’t see it going down,” said Xue.
He adds that the group is not concerned about increased settlement risks in its Australian projects as Chinese investors face severe limitations on exchanging currency.
“In a typical project we have two years for the purchase to settle or to transfer the money and the majority of them will apply for the mortgage in Australia. I think the (Chinese government actions) will only be temporary,” said Xue.
Starryland Australia director Hao Liu says a slowdown in the local market is expected.
“It is not going to affect our strategy in Australia because that’s what we were expecting. If you compared the market to five or seven years ago then it is quite normal,” Liu says.
Liu, also mentions that those Chinese-born buyers who were part of Sydney’s Parramatta project, were mainly Australian residents who were not affected by China’s financial controls.
Chinese agricultural giant, New Hope, is stepping up into the Australian property market.
The group has started construction of its 43-storey residential tower in Sydney’s St Leonards and this is only the beginning.
New Hope General Manager, Frank Ru, said that Australia has always been an attractive location for Chinese investment, but development is looking even better for the time being.
“Property prices here are still much lower than many Tier 1 cities in China, and for that you get clean air, views and a harbour city. They say that prices can’t keep rising, but there’s a phenomenal amount of people who still think prices are very attractive,” said Ru.
Shanghai-listed developer group, Poly Real Estate, still aims to be a top developer in Australia.
The Managing Director, Yuan Tao, said that Poly is trying to appeal to the local market rather than Chinese investors. This means that the company will be safe if Chinese off-the-plan buyers dry up.
“Chinese investors are still a very strong market for us but we also want to become a real local company and we are focused on designing apartments for locals rather than the offshore market,” said Yuan.
The outlook for Australia is something to keep an eye out for.