Asian investors to step up australian property invasion

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A report by Credit Suisse predicted that investors from Asia will step up their investment in Australian property in the coming years, with a total of $44 billion expected by 2020, far higher than the $24 billion invested in the past seven years.

“Our forecasts already assume the amount of Chinese wealth creation slows materially, in-line with a less buoyant Chinese property market. We need to forecast more extreme distress in China for us to lower our longer-term assumptions on flows into Aussie residential property,” said Hasan Tevfik of the firm.

Indeed, a report from global investment manager Nomura this month has forecast that China's property market is moving towards a correctional period, with economic growth expected to slow.

“We argue the correction has been triggered by monetary policy tightening since mid-2013 and that the downtrend will continue unless policy tightening reverses into loosening,” said Nomura's research analysts in a report quoted by the Sydney Morning Herald.

As a result, Mr. Tevfik says that Chinese buyers are likely to become even more active Down Under, continuing to push up house prices in major cities. The average value in Sydney, for example, has now climbed to $800,000, with some experts worried that overseas investors is pricing out domestic buyers from the market.

“Residents in Sydney and Melbourne are understanding that the rules of property prices are changing and should expect even more demand for local real-estate from Chinese investors as they look for a more stable store of wealth. Globally desirable cities, like the major ones in Australia, will always be destinations for foreign capital,” he said.