According to Juwai.com, the weakness of the Chinese yuan and the trade war could be beneficial for the Australian real estate market.
"There has been a lot of talk about the weakness of the Chinese yuan and how it could curb investment abroad. In the case of Australia, we are not in agreement. The weakness of the yuan is not a drag on investment in Australian real estate, "said Carrie Law, CEO and Director of Juwai.com.
The Australian yuan / dollar exchange rate is currently up about 6% from the number recorded in the same period last year. This means that the relative benefit of exchange rates is higher in Australia than in other major countries. As the yuan lost ground against the US dollar and other major currencies, it gained ground against the Australian.
This has caused the yuan to become an incentive for Chinese buyers to direct their investments to Australia and other countries where their purchasing power is still high.
The report also revealed that some Chinese investors might choose to enter the Australian market, the commercial war making some more worried about buying real estate in the United States. Chinese students withdrawn from American schools and universities may also choose to go to Australia, which would also impact local real estate investments.
"The trade war could mean more Chinese investments for Australia," Law said.
The factors that hinder investment in Australia can not, however, be excluded from the equation.
"A number of constraints prevent Chinese acquisitions of Australian properties at rates well below real demand. Chinese demand is vast, as revealed by the prosperous investment years of 2015 and especially 2016. But today, the desire to buy a property in Australia is curbed. Our metaphor is aquatic. The huge reservoir of Chinese demand is like water held back by a dam. The dam includes capital controls, expensive Australian taxes on Australian foreign buyers, and difficulties in securing financing in Australia, "said Law.
If a substantial change occurred in any of these areas, the activity of buyers could increase correspondingly.
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