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中文Yuan devaluation encourages Chinese investments in Australian property
18 Sep 2015 - Four C Realty
The unexpected devaluatation of the Chinese currency in August could drive an increase in the amount of money being invested in Australian property, industry experts believe.
While global markets recoiled in shock from the move by the People's Bank of China on Tuesday, property experts said that contrary to some forecasts the move would work in Australia's favour.
"I think it would start a new direction and it's going to bring more money out of China and offshore," Knight Frank's head of Asian markets Dominic Ong said.
"The Chinese yuan has been pegged to the US for long time and now we see a strategic change. How far the yuan will keep going down, we don't know. So the Chinese want to act quickly to get their money out."
Colliers International's Asian division executive, David Sia had the same view.
"I expect July's monetary policy changes in China to encourage more investment in international domiciles, like Australia, that have a history of high quality with lower volatility investment performance," he said.
"Most Chinese investors would perceive Australian property as being less likely to decline in value given comparable supply and demand metrics between tier one and two cities in China and Sydney and Melbourne. These are continuing safe havens for wealth preservation."
The "minor" yuan devaluation and Australia's "safe haven" status would keep funds flowing into the country, ANZ and Deloitte confirmed. Both companies were seeing a boom in business from China – better than 12 months ago.
Deloitte real estate partner, Damian Winterburn, who helped to close $300 to $400 million in deals for high net worth Chinese individuals and developers in the last quarter, said would not stop the "wall of Chinese capital from coming".
"This is a small blip… compare it with the 20 per cent devaluation it has had in the last 12 months," he said.
"We are still seeing hundreds of clients; at least one group a week coming out from China to invest in property and projects."
He added Foreign Investment Review Board limitations on sales to Chinese buyers had caused enough pent-up pressure from excess demand to override any negative effects from the yuan.
Property matchmaker, Juwai.com said "nothing has changed this week" in China.
"If China's currency keeps falling, that could be a boon for Australia, leading to greater commercial, development and residential investment from China. In that situation, the weak Aussie dollar would be like an open door, beckoning investors in. Meanwhile, the strong US dollar would make that country less affordable for Chinese buyers on a budget," co-CEO of Juwai.com Andrew Taylor said.
"In the unlikely event that the currency shift does affect consumer behaviour, Australia stands to benefit, as a relatively close destination than Europe or North America."
The above is an extract from:
http://www.afr.com/real-estate/yuan-devaluation-wont-stop-chinese-investments-in-australian-property-20150814-gizew7
Caroline He
Four C Realty