Realtors in Australia, Britain and Canada are bracing for a surge of new interest in their already hot property markets, with early signs that wealthy Chinese investors are seeking a safe haven from the turmoil in Shanghai’s equity markets.
Sydney realtor Michael Pallier said in the past week alone he has sold two new apartments and shown a A$13.8 million (US$10.3 million) house in the harborside city to Chinese buyers looking for an alternative to stocks.
“A lot of high net worth individuals had already taken money out of the stock market because it was getting just too hot,” said Pallier, the principal of Sydney Sotheby’s International Realty. “There’s a huge amount of cash sitting in China and I think you’ll find a lot of that comes to the Australian property market.”
Photo: Reuters
About 20 percent has been knocked off the value of Chinese shares since the middle of last month, although attempts by authorities to stem the bleeding are having some effect.
Many wealthy Chinese investors had already cashed out. Major shareholders sold 360 billion yuan (US$58 billion) in the first five months of this year alone, compared to 190 billion yuan in all of last year and an average of 100 billion yuan in prior years, according to Bank of America Merrill Lynch.
While much of that money may initially be parked in more liquid assets such as US Treasury bonds and safe-haven currencies such as the Swiss franc, there is growing evidence that foreign property sales may receive a boost.
“There is anecdotal evidence that Chinese buyers have intensified their interest in ‘safe haven’ global property markets, including London, as a result of the recent stock market volatility,” said Tom Bill, head of London residential research at Knight Frank.
Ed Mead, executive director of realtor Douglas & Gordon in London, said his firm had seen two buyers from China looking to buy whole blocks of apartments.
“It is unusual to see the Chinese block buying, it implies that this is a capital movement rather than just individuals looking to park money,” he said.
Since 2000, China has had the world’s largest outflow of high net worth individuals. About 91,000 wealthy Chinese sought second citizenship between 2000 and last year, according to a report by residence investment broker Lio Global, a factor that is fueling demand to buy foreign property.
Most of these individuals, defined as those with net assets of US$1 million or more excluding their primary residences, are moving to the US, Hong Kong, Singapore and Britain.
Brian Ward, president of capital markets and investment services for the Americas at commercial property company Colliers International, said Chinese investors had already sunk about US$5 billion into US real estate in the first six months of this year, more than the US$4 billion they invested in the whole of last year.
In London, Alex Newall, managing director of super prime residential realtor Hanover Private Office estate agents, said he had seen an increase in interest from Chinese investors at the top of the market, although no transactions yet.
“They’re wanting to try and park large sums of money — I’m talking from 25 million pounds [US$38.5 million] to 150 million pounds,” Newell said. “They’re looking to park that capital into London homes.”
Australia and Canada are also increasing in popularity, gaining an edge from their weakening currencies.
“Property prices are still cheap in RMB [yuan] terms,” said Timothy Cheung, a principal of Morphic Asset Management in Sydney.
The rush by Chinese investors into foreign property has not been without criticism, with some in London, Sydney and Vancouver blaming them for pushing up already spiraling prices.
The Australian government has moved to look tough on the issue, introducing new fees and jail terms for those found flouting foreign investment rules. The Chinese owner of a A$39 million Sydney mansion was forced to sell up earlier this year after it was revealed the property had been bought illegally through a string of shell companies.
Others are concerned that Chinese investors who did not bail out of stocks quickly enough will be a drag on international property markets, particularly after Beijing on Thursday banned shareholders with large stakes in listed firms from selling for six months.
In London, London Central Portfolio chief executive Naomi Heaton said she had heard of investors pulling out of new-build purchases because they no longer had the capital.
It was a similar story for Vancouver real estate agent Andrew Hasman, who focuses on the city’s affluent Westside area.
“I had a call last week from another agent wanting to know if a seller of a transaction we just did would allow the buyer to back out, because they had just recently lost a huge amount of money in the Chinese stock market correction,” Hasman said.
Vincent Wei led fellow Singaporean farmers around an empty Malaysian plot, laying out plans for a greenhouse and rows of leafy vegetables. What he pitched was not just space for crops, but a lifeline for growers struggling to make ends meet in a city-state with high prices and little vacant land. The future agriculture hub is part of a joint special economic zone launched last year by the two neighbors, expected to cost US$123 million and produce 10,000 tonnes of fresh produce annually. It is attracting Singaporean farmers with promises of cheaper land, labor and energy just over the border.
KEEPING UP: The acquisition of a cleanroom in Taiwan would enable Micron to increase production in a market where demand continues to outpace supply, a Micron official said Micron Technology Inc has signed a letter of intent to buy a fabrication site in Taiwan from Powerchip Semiconductor Manufacturing Corp (力積電) for US$1.8 billion to expand its production of memory chips. Micron would take control of the P5 site in Miaoli County’s Tongluo Township (銅鑼) and plans to ramp up DRAM production in phases after the transaction closes in the second quarter, the company said in a statement on Saturday. The acquisition includes an existing 12 inch fab cleanroom of 27,871m2 and would further position Micron to address growing global demand for memory solutions, the company said. Micron expects the transaction to
US actor Matthew McConaughey has filed recordings of his image and voice with US patent authorities to protect them from unauthorized usage by artificial intelligence (AI) platforms, a representative said earlier this week. Several video clips and audio recordings were registered by the commercial arm of the Just Keep Livin’ Foundation, a non-profit created by the Oscar-winning actor and his wife, Camila, according to the US Patent and Trademark Office database. Many artists are increasingly concerned about the uncontrolled use of their image via generative AI since the rollout of ChatGPT and other AI-powered tools. Several US states have adopted
A proposed billionaires’ tax in California has ignited a political uproar in Silicon Valley, with tech titans threatening to leave the state while California Governor Gavin Newsom of the Democratic Party maneuvers to defeat a levy that he fears would lead to an exodus of wealth. A technology mecca, California has more billionaires than any other US state — a few hundred, by some estimates. About half its personal income tax revenue, a financial backbone in the nearly US$350 billion budget, comes from the top 1 percent of earners. A large healthcare union is attempting to place a proposal before
RSS