China’s spending spree in Australia soars

China’s spending spree in Australia soars, by Lucy Macken.

China’s crackdown on capital outflows into overseas property markets doesn’t appear to be working judging by the surge in investment from its shores into Australian real estate.

Chinese buyers led a 19 per cent jump in residential applications to 40,149, according to the Foreign Investment Review Board annual report, equating to a peak of proposed investment worth $72.4 billion for the 2015-16 financial year.

The surge in interest from China’s swelling investor class isn’t lost on Treasurer Scott Morrison, with foreign buyers again being slugged with steeper charges on purchases and new fees on property left vacant for six months or more announced in Tuesday’s federal budget.

“If anything I would say the investment coming from China has increased, not decreased, since China’s crackdown was launched,” said joint principal of SydneySlice Buyers’ Agent, Steve Smith.

“My sources are suggesting that the government is actually amending the foreign capital restrictions, which could make it easier for foreign investors, and if that’s the case we will see local activity increasing, not decreasing.”

Craig Pontey, director of Ray White Double Bay in Sydney, said buyer interest from China wasn’t just increasing, but “substantially increasing” in both sales and buyer inquiry from China.

“The buyers who dominated sales three and four years ago are being joined by their friends and colleagues from China, and they are finding ways to filter their money out of China to do so,” said Mr Pontey. …

For the third year in a row China was the largest source of approved investment across all sectors, staking a claim to 72 per cent of all approvals.