Property slowdown no concern for Chinese investors

Some of China’s largest developers say they are still intent on expanding in Australia despite fears of a slowdown in apartments and the imposition of tougher controls on Chinese outbound investment.

Greenland Group, China Poly Group, Country Garden and Starryland Australia are among the companies that say that their growth plans here remain bullish.

Analysts have warned that Chinese property investment in Australia may slow as the central government seeks to limit the amount of money leaving the country in an attempt to protect its volatile sharemarkets.

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A slowdown in Chinese off-the-plan buyers would suffocate a key market for Chinese developers at the same time that local demand for residential property in Sydney and Melbourne is slowing.

But Greenland Australia assistant managing director Kang Xue says the group is still ambitious about its prospects to grow in Australia.

The real estate industry will have some fluctuation but as a long-term investor we are very optimistic

Last week, a report from broker CLSA said the apartment cycle was on the verge of a sharp decline while National Australia Bank forecast apartment prices would fall more than 1% for the year.

“I disagree that the entire market will slow down. There are hot spots and cold spots and the overall market we think is stable. Especially in Sydney we don’t see it going down,” Xue says.

He adds that the group is not concerned about increased settlement risks in its Australian projects as Chinese investors face draconian limitations on exchanging currency.

A slowdown in Chinese off-the-plan buyers would suffocate a key market for Chinese developers

“In a typical project we have two years for the purchase to settle or to transfer the money and the majority of them will apply for the mortgage in Australia. I think the (Chinese government actions) will only be temporary,” Xue says.

Starryland Australia director Hao Liu says a slowdown in the local market is expected.

“It is not going to affect our strategy in Australia because that’s what we were expecting. If you compared the market to five or seven years ago then it is quite normal,” Liu says.

Liu, whose Starryland is a subsidiary of Wuhan-based Fuxing Huiyu Real Estate, adds that the Chinese-born buyers in its first project in Sydney’s Parramatta were mainly Australian residents who were not affected by China’s financial controls.

There are hot spots and cold spots and the overall market we think is stable. Especially in Sydney we don’t see it going down

The managing director of the Victorian arm of Poly Real Estate, Yuan Tao, says the Shanghai-listed group still aims to be a top three developer here.

He says Poly tried to appeal to the local market rather than Chinese investors, which would protect the company if Chinese off-the-plan buyers dried up.

“Chinese investors are still a very strong market for us but we also want to become a real local company and we are focused on designing apartments for locals rather than the offshore market,” Yuan says.

“We use local consultants, local project managers and local architects.”

Country Garden’s global executives recently said it was looking to expand in Australia through joint venture partnerships or corporate activity.

“We are very optimistic about the outlook of Australia and New Zealand. The real estate industry will have some fluctuation but as a long-term investor we are very optimistic,” vice-president Lin Zhaoxian says.

This article originally appeared on www.theaustralian.com.au/property.