Chinese investors offered no deposit loans for Australian property

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Chinese investors looking to invest in the Australian property market are being given the opportunity to do so thanks to loans carrying interest rates usually associated with credit cards.
According to reports in the Australian Financial Review, Chinese insurance company Ping An Insurance is offering investors no deposit home loans with interest rates of more than 10%. 
According to the AFR, the loans from Ping An are available to Chinese investors looking to buy into two developments in Melbourne and the Gold Coast, but could be rolled out for more developments if they prove popular.
The loans from Ping An would cover 30% of the purchase price of a home in Australia and would carry an interest rate of 14%.
Chinese investors would then turn to Australian lenders to secure finance for the remaining 70% of the purchase price.
The loans are being promoted to Chinese investors by property agency Austpac.
"You can walk into one of our seminars without a dollar in your pocket and still buy an Australian property," Austpac manager Eddie Yuen told the AFR.
While the interest rate may seem high, Yuen told the AFR it is lower than what many people pay for personal loans in mainland China, where rates can be as high as 16%.
Yuen also denied the loans were designed to be attractive to investors looking to flip the properties for a quick profit.
"We would never promote the loan for speculation as this is not smart for Australian property, where costs like stamp duty are high," Yuen told the AFR.
The loans are also required to be secured against a property in China that the investor owns outright.
While loan arrangements such as these may seem extreme compared to Australian lending practices, it may just be a case of firms cashing in on the demand for Australian real estate among Chinese investors, which is growing.

“China is just beginning to deregulate its capital export controls, its economy is still growing at something like twice the rate of developed economies, and its people are big believers in real estate as an asset class,” Andrew Taylor, co-chief executive officer of, which markets Australian real estate to Chinese buyers, said.

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  • Matt Gross says on 28/10/2015 02:23:06 PM

    The buses are back and the Chinese investors are being taken to multiple developments in order to lock in contracts. This is from house and land packages in the western suburbs right through to multi-million dollar apartments. As the local market seems to be slowly tempering their thirst for investment property on the back of falling rents and increased vacancy rates in many suburbs, this no deposit home loan being offered by Chinese Banks will only serve to heighten the investment risk to all parties. When the supply of property, particularly apartments in the current cycle exceeds population growth - both current and forecast; the outcome is likely to be a sustained period of low to no growth. If it is the latter, the reality is that the asset value is going backwards in real terms. The damage that occurred in Australia's regional centres through overzealous property marketers/spruikers may well be on its way in many of Australia's capital cities. However with a typical build program of two years or more, by the time the problem is recognised, the horse will not only have bolted, it will have won the equivalent of the Melbourne cup two times over.

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