Chinese buyers to increase in 2016

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Almost all 150 agencies surveyed by Investorist for its China 2016 International Property Outlook agreed that Chinese investments would continue to grow in 2016, possibly surpassing its figures in 2015.

According to Foreign Investment Review Board data, Chinese investment in Australian real estate doubled in 2015. In addition, Chinese Buyer Report April 2016 also showed that Chinese buyers made 87.1 per cent more purchasing enquiries to property sellers than in 2014, with most inquiries addressing Waterloo, Bankstown, Turramurra, Ultimo, and Sydney CBD.

However, this demand could be affected by the ability of Chinese buyers to source funds from China, even though Chinese clients "have shown that they are very resourceful and they will find a way to effectively navigate the changes to foreign capital allowances," said Investorist chief executive Jon Ellis.

Banks' tighter lending policies may also be a hindrance. Commonwealth Bank, the country's largest mortgage lender, announced in mid-April that it will no longer approve applications that cite self-employed foreign income. ANZ, NAB, and Westpac eventually followed suit.

"With restrictions on bringing money in and lending restrictions, a lot of these sales will fall over in the next 12 months," said Michael Khoury, a mortgage consultant at Mortgage One Australia. He  also noted that the slowing market and excess apartment supply may also hamper future developments.

However, ACProperty director Esther Young believes that most Chinese buyers will have a substantial cash buffer to cover any problems with funding since they are generally not huge risk takers. Since second and third tier banks did not follow CBA's decision, "demand should not be overly dampened by this factor," she said.

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