China's market problem continues and its effect could be felt in Australia.
China's sharemarket woes may have a longer effect than expected, especially on the demand for Australian property experts say based on the report by Financial Review.
Way back in July, when Chinese markets were just starting to dive, it was predicted that more capital will pour into Australia, with properties as the target but now, it is not the case. The impact could be felt short term, for a period of 6 to 12 months.
The 7 per cent plunge on Jan. 4 and a similar after shock on Jan. 7 can be seen as China's warning to have a harder grip on its capital which would limit purchases of properties abroad.
Dr. Shane Oliver, AMP Capital chief economist, said, "It's unusual this time...The dent could be longer lasting and there's a bit more to come and more impact on property."
The chairman of Chinese high net worth group, the Australia China Entrepreneurs Club, Richard Yuan admitted that transferring money is harder now.
He said, "More policy is expected to tighten capital flow. The desire to buy here is strong but the cash may not be available. Many have lost money in China, and have less disposable income to buy overseas."
However, according to Christie's International Real Estate's Martin Ross, a lot of high-end buyers have already managed to transfer funds out of China and into Australia. In fact, he has actually received more calls from from new prospect buyers since the Chinese markets started to get shaky.
He said, "One buyer even asked me to get him a 2000sq m home in Sydney's eastern suburbs. He doesn't see the problem with China - China is its own beast."
In addition, National Research Manager Mathew Tille said, "Over the last quarter data has shown that investors have been moving away from real estate...However investors will begin to reconsider property...the current share market instability will have a lot of investors looking for a safer and less volatile investment and real estate markets will benefit from this."
