How do you say GOODBYE in MANDARIN? Chinese investment - massive drop

Is Singapore the new China for foreign investment in Australian property?


Todd Herron and many other property valuers have called a declining market in Sydney, Auction clearance rates down . . .

But THIS is the big one to accelerate drop in Sydney. The chinese govt is fixing what APRA and AUSTRAC couldnt!

 

Zai jian ?

 

Perhaps people should read the complete article including this.


Signs are emerging that the capital inflow from China to Australian property is slowing, but is being offset by Singaporean investors.

Is Singapore the new China for foreign investment in Australian property?

 

Singapore is so small (in everything (incl, wealth and economy) compared to other south east asian country let along china) rich government due to sovereign fund investment but its middle class is relatively has very average wealth compared to other first world country. the top 5% in indonesia,thailand,malaysia or Philippines. is bigger than the whole of singapore. the singaporean sovereign fund is already in australia a long long time ago, dont see how the middle class can come here to invest when they can hardly afford a home in their own country.

 

I would guess that what matters is that the investment is happening not whether you can see how it can be afforded.

Perhaps it's money from elsewhere funnelled through Singapore.

 

From observation, many common Singaporeans see buying an Aussie house as a viable investment. A peek into their National newspapers every Sunday will reveal how many properties here are marketed in Singapore. Australia has constantly ranked among the top countries for Singaporeans to migrate to. So I believe investments from these common people, though not be as numerous as the Chinese or Indians, they do add up to be substantial.

Singapore is small, yes! Its land area is only 780sqm, slightly bigger than Kangaroo Island in South Australia and having "just" 5.5 million people... But it is a very important and successful financial hub in Asia. Numerous companies from neighbouring nations used it as a base to expand to Australia due to reasons such as it's low tax rate, ease of transaction, it's highly trained labour force, its good reputation as a place where "everything works" and so on. It might come as a surprise therefore, to some that one of the biggest Agriculture company here in Australia is actually owned by an Aussie who now operate from Singapore! So on paper, this company is classified as from Singapore (not Australia), as will be the case for many other companies from elsewhere.

Not to forget, there are also a no of very strong Singapore grown real estate companies (including govt backed ones) that have been investing in properties in Australia for years. They worked in very low profile manner (unlike the Chinese) and are known to have a liking for premium commercial properties in the capital cities where there's no restriction in buying.

And possibly because the government of Singapore and Australia are in excellent relationship (akin to Australia - New Zealand as some said), the coming of these Singaporean companies are not seen as a "threat" to many locals as compared to say, the Chinese. Hence, people don't feel their presence so much.

As such, some would be surprised with the above report when in fact, Singapore investment in Australia has been happening for years, just that it's not really reported.

 

are you serious? some of the electricity grids are partly owned by who in Australia? It has the strongest currency in SE Asia

0.99 -1.99% home loans funded by HSBC and ANZ in Singapore to purchase homes in Australia

 

Dui.

 

Feichange Hao de xianshengmen.

Regardless of SG involvement. If Chinese foreign nationals have stopped that will have a massive effect as they currently make up nearly 35% of sales in Sydney.

 

Meanwhile in other non-china relate companies are coming in. Sydney has more china funded devs I believe.

Did post this elsewhere.

 

this article is mainly referring to commerical + developments for large corporates in china doing outbound investment

cashed up individuals from there buying up certain pockets of sydney residential is another story altogether

seems we have lots of people waiting for a drop in sydney, any excuse will do!

 

Regardless of source or sovereignty of funds. A price DROP will dampen all sorts of demand.

And here we go, Sydney prices are expected to drop in August...

Sydney house prices expected to flatline and even decline in August: Corelogic

 

and we've heard that story before too back in 2015, even from the famous doctor oliver and doctor wilson

“The APRA measures, particularly with the interest rate hikes over the last few months, have well and truly burst the property bubble in Sydney,” Dr Oliver said.

"“There is no doubt that the key trend in the stronger markets is a decline,” Dr Wilson said, pointing to the direct correlation between falling clearance rates and subdued price growth."

Sydney house prices fall in November: report

and they were both wrong

im not saying it will forever keep going up, but don't start partying yet.

whilst it's true theres less competition at auctions, sellers in the areas im looking at are still demanding high prices

people need to be in a lot more stress before letting go of their prized mill - two million plus dollar properties

 

Sixty nine percent is a pretty big reduction so quickly.

 

More than anything else, sydneys performance is dependant on jobs.
..not just their own jobs, but jobs relative to other centers.
Because both of these indicators ( their own jobs and the amount more - ex salary- they have than their competiting cities such as perth, adelaide etc) are healthy, sydney will be ok. It wont continue forever though..and when it stops ( likely gradual), then overleveraged mortgage holders will feel the pinch in sydney in particular because their salaries are usually the sole source of income and that too only marginally higher than melbourne/brisbane yet significantly higher buy in ( and assumed lend on mortgage).
Not at that stage yet, but very likely closer to it than say 6 months prior- but not significantly.

 

Actually disagree . . . this last boom has been driven by credit growth and flight to higher yielding investments from international investors.

Therefore - when these trends turn it will be significant.
From a credit perspective - i'm sure most brokers will attest that environment has been tightening.
From a foreign flow perspective...Here we have seen a 69% drop in Chinese flows...

Disregard if you like, but when local sentiment has changed and foreign flows have declined . . . we will see some disorderly unwinding of boom conditions.

To be fair even a 10-20% drop will only take us back to 2014 levels so shouldnt cause that much grief unless you have recently become overleveraged..

 

read my previous post you would know that i acknowledge the wealth and power of their sovereign fund. optus and Singapore power(who recently sold some holdings in australian grid) are subsidiaries to Temasik Holdings). I am not saying Singapore does not have successful business but the fact is that thier middle/upper class is not wealth compared to others.

mortgages from singapore hsbc/anz and their local banks, can be applied by any nationals to buy in any country, even if your not from singapore. so dont mean that its singaporean investing, its just Singaporean loan. do you have proper stats ?

One more thing you guys dont know about singaporeans are most of them live in HDB flats or government subsidies funding. The golden rule is, This HDB flats can be the One and ONLY property you own IN THE WORLD. so anything they buy after that before selling this HDB flats its considered illegal. you also cant own any property prior to buying a HDB or you will be disqualified.

every single company listed are malaysians, yes its an malaysian newspaper. again not singaporean for those who dont know.


one thing singaporean has going on for them is currency exchange. Very strong.

i think malaysia and indonesian has more investment in australia from a property development point of view.

singaporean business tend to invest in infrastructure because the lack of in their countries and they love REITS.

 

unless the bank reveal nationality there is no way to know - another aspect you need to consider is Singapore has a very large Indonesian community (from the top 10%) of the country which put their money in Singapore. Even the president son studies in Singapore.

And yes I acknowledge the middle class just get by and yes as long as you are not a resident and yes all foreigners (even non residents of Singapore and non-residents of australia can purchase Aussie homes) for the 0.99% to 1.99%. Bulk loads of Indonesians doing it now.Even if you are resident of Australia you could legitimately do it with a company (no biggie) I know at least 20+ individuals who refinance their homes in Singapore to buy in Australia. Again - why wouldn't the average person do it when the returns are far more and you borrowing at far less. Maybe it is just the indivdual view on what middle class is.

If you are talking currency - Malaysian and Indonesian earnings in Ringgit and Rupiah, Singapore dollar buys more

you are right in saying Malaysia and Indonesia has bigger capacity but Singapore does have big devs in Australia as well (Far East Organzation, Fragrance Group's, Wee Hur etc)

 

. exactly. which means they are Indonesians and not Singaporean investing in Australia. people who parks cash in singapore includes all other sea country. almost all SEA i know buys this way. whos gonna borrow from Australian banks when you can get half the price. Singapore dollar buy more but as you have acknowledge indonesians and malaysian make much more.. currency exchange is only worth something if you have enough of it.. you place top 5m of Indonesians against 5m singapore(which is almost the whole country) who has more buying power ??
singapore dollar buy more if you have the same but unfortunately they dont earn enough.

singapore middle class goes to holiday in bali, thailand and malaysia
thai's, malaysian and indonesian middle class goes holiday in singapore.


who has more money ?

 

End of the day - there are middle class in all SE Asian countries that can buy stuff and ones that don't. We can't generalise that one country has middle class that can buy and one can't it is all circumstancial.

The analogy of going to bali, Thailand and Malaysia vs "Malaysian and Indonesian" going to singapore is prob not that accurate - of course each individuals would go to the other country for holiday as it is different - why would a Singaporean holiday in Singapore in the first palce. Secondly, they could live in a hut in bali or bulgari resort in uluwatu. Same applies for those visiting sinagpore either shared airbnb rooms or a place off orchard road.

As for earning more - just put a base accountant in PWC in Singapore vs an accountant in PWC Malaysia or Indonesia within the 10 years of working would still earn more and would be more capable or have higher probability to purchase an investment in as logically currency wise it trumps As for buying using low rates from those Singaporean banks - simply stating that it is way to make a return irrespective or which country you are from. Of course in Indonesia - business is the way to go some ppl make a million in a year just on deals, as this is not necessarily the case for singaporeans.

anyway, We are sort of straying away from property investment and talking about social classes in different countries.