Chinese investment dropping to six-year low

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Chinese investors and developers play a vital part in the Australian property sector, but the good times look to be over for investors. Chinese investment in Australia’s commercial property has dipped to its the lowest level in six years, a result of significant regulations from the mainland.

Property brokerage CBRE Group revealed on Monday that direct investment dropped 81% to $250 million compared to the first half from 2017, which saw $1.3 billion in direct investment.

“If these restrictions continue, we expect Chinese investment into Australia to record its lowest year since 2012,” said Ben Martin-Henry, Associate Director of Capital Markets and Forecasting. These new capital controls are having a “meaningful impact” globally, he added.

China’s strict restrictions have seriously curbed industry players’ ability to acquire global assets, with groups including including Dalian Wanda Group, Anbang Insurance Group, Fosun International and HNA Group – which sold an office tower in Sydney earlier this year – spending far less than previously. CBRE’s data showed that Chinese spending on Australian commercial property is currently down from a $2 billion high in 2015.

Even with Chinese investment at a low, foreign buyers are still purchasing commercial property in Australia. According to CRBE, the biggest foreign buyers of Australian commercial property in the first half were U.S. ($994 million), Singapore ($626 million) and Hong Kong ($560 million). Notably, development sites weren’t included in the figures, only finished buildings.

 

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