Chinese developers pulling out

Byebye commies, this will probably start the apartment apocalypse if anything...

Chinese developers 'walking away' from Australian projects

 

Pretty tricky to secure finance now for this market segment.

 

Unless they think they can get it cheaper in 5 years time.

 

For those that understand China political environment, Dalian Wanda is one of the largest developer in China, probably on par with Greenland. The reason this group is pulling out was because of the Chinese government demand all these international investment companies to stop their overseas project and pull all the funds back to China. Similar to the Trump's tax strategy by pulling all overseas investment back into the US, but with a more direct approach.

What is happening was these companies are not transferring their profits back to China after they make a deal, while they kept pumping money out of China to fund the projects. Which kind of go against China's capital control.

I believe the smaller developers are still able to fund these development projects. But very soon the government will catch up to them. They are too busy to fry these big fishes at the moment.

 

200 less apartments will help the non-apocalypse side of things

 

Bitcoin being illegal shuts down another avenue of cash moving off the mainland

 

Less new developments while immigration keeps doing its thing - might be rosy from a rental demand POV. Fingers crossed!

 

Yes, however, asking-rent rates for this kind of stock will be capped somewhat.

With the growing population I would ordinarily say 'supply and demand, folks. More humans, less apartments for rent = increased asking-rents'.

But these are not normal times. With wage growth stagnant and going backwards in some places, and underemployment rife; people simply arent earning much more money to afford high rents. If anything... rental demand in outer suburbs where rents are much cheaper, might see an uptick in those areas.

To me it is all about yields right now in these times. Cash flow is vital right now as further capital growth in most 'major' markets seems unlikely for the coming years ahead.

 

sounds like Wanda is lots of trouble lately...

China puts Wanda under spotlight, closes off loan options for breaching investment rule | South China Morning Post

 

Yep they are enforcing more harsh sentences for breaches recently

 

One of the guys in my whatsapp chat group posted this... thought it belonged to here.

China’s overseas buyers leave a ‘black eye’ for others investing

 

More data confirming less Chinese interest

Chinese buyers losing interest in Sydney property ... with one exception

 

Different story in US
Chinese buyers led the pack for the fourth straight year

 

.... and meanwhile this morning , CBRE sent me an email for the one circular quay development which is done by wanda...

if there's a will, there's a way. they will find their financing (e.g. shadow loan / hedge funds etc..)

 

Private lender launches foreign buyer mortgage

Will be interesting to see how this pans out.

 

what could possibly go wrong?

 

If LVR is is healthy I think it's a good business idea. I think just looking at this more with Business lending criteria rather than residential is the way to go.

 

Foreign buyers down. Particularly in NSW.

Overall, foreign purchases of new housing fell to 9.5 per cent of the country's total, a five-year low, the NAB report shows.

"Lower foreign buying activity in new property markets was led by Victoria, where the share ofsales to foreign buyers fell to 14.4 per cent (from 20.8 per cent in Q2)," the report said.

"Foreign buyers were also noticeably less prevalent in NSW, where their market share fell to 7.8 per cent - its lowest level since Q1 2012 and down from 12 per cent in Q2. The proportion of foreign buyers in new property markets also fell in WA to 4.5 per cent (6.9 per cent in Q2). In contrast, foreign buyersincreased their market share in QLD to 11.4 per cent (8.6 per cent in Q2) despite the introduction of aforeign investor land tax surcharge in July 2017."



Read more: NAB cuts Sydney house price outlook, upgrades Melbourne
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