Home buy­ing in Aus­tralia ‘eas­ing’

China Daily (Canada) - - ACROSS CANADA - By BLOOMBERG

Chi­nese de­mand for Aus­tralian prop­erty, which has helped pro­pel the price of an av­er­age Syd­ney house to about A$1 mil­lion ($720,000), is wan­ing as an eco­nomic slow­down at home dents con­fi­dence, ac­cord­ing to Credit Suisse Group AG.

Fall­ing auc­tion clear­ance rates in Syd­ney and Mel­bourne, twoof the­most­pop­u­lar des­ti­na­tions for pur­chasers from China in Aus­tralia, sug­gest there are fewer cashed-up for­eign buy­ers, Credit Suisse an­a­lysts Damien Boey and Hasan Tev­fik said in a re­port on Tues­day. China’s sur­prise cur­rency de­pre­ci­a­tion in Au­gusthas­dimmed­con­sumer con­fi­dence and ap­petite for over­seas prop­erty world­wide, they said.

Home val­ues in places such as Syd­ney, Van­cou­ver and parts of the US have been surg­ing asChi­nese buy­ers seek­ing a safe haven for their cash cir­cum­vent con­trols at home to pile into prop­er­ties abroad. In Syd­ney, home val­ues jumped 44per­cent in the three years to Septem­ber, spurred by record­low in­ter­est rates and a stream of buy­ers from China who were es­ti­mated to be snap­ping up al­most a quar­ter of the city’s newhomes.

“Chi­nese de­mand seems to have flat­tened out,” the Credit Suisse an­a­lysts said, re­fer­ring to the Aus­tralian mar­ket. “It is the cycli­cally poor con­di­tion of theChinese mid­dle-toup­per class which is driv­ing the slow­down in prop­erty buy­ing abroad.”

In re­cent months, the pro­por­tion of home auc­tions in Syd­ney that suc­cess­fully found a pur­chaser has plum­meted to the mid-60 per­cent range from more than 90 per­cent ear­lier in the year as buy­ers balked at prices and the bank­ing reg­u­la­tor clamped down on mort­gage lend­ing. Most homes in Syd­ney are sold at auc­tions.

The wan­ing con­fi­dence among Chi­nese buy­ers could dim their ap­petite for global prop­erty by 30 per­cent in 2015, said Syd­ney-based Boey and Tev­fik. That is based on the cor­re­la­tion of Chi­nese con­sumer con­fi­dence with growth in US all-cash home sales, they said.

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