China still has a taste for housing

OFFSHORE demand for Australian property looks set to remain buoyant, with a clampdown on Chinese capital outflows having little impact locally, according to investment bank Credit Suisse.

The foreign interest looks set to support the Australian housing market and insulate prices from a collapse, research by analysts Hasan Tevfik and Peter Liu has found.

Their research comes as soaring price growth in Australia’s east coast capitals has started to show signs of easing, amid a crackdown on lending to higher-risk investors and levies for foreign buyers in some states.

“There is little evidence that new capital controls by the Chinese authorities, announced in December 2016, have slowed demand for Aussie housing,” the analysts wrote. “We continue to expect a stronger-for-longer backdrop for Aussie housing.

“Moderation should continue but Chinese demand suggests we ought to remain sceptical of (the prospects for) a collapse.”

The wealth created in China was set to lead to more, not less, foreign purchases of Australian property, Mr Tevfik said.

Residential-exposed companies would benefit from the boom, Credit Suisse said.