Chinese demand for Australian real estate has dropped up to 15% from a year earlier, according to the head of a major real estate network, as Sydney and Melbourne prices reach the end of their growth cycle.
Speaking at McGrath’s debut on the Australian share market in Sydney on Monday, the chief executive of the real estate network, James McGrath, said interest from foreign Chinese investors has taken a step back as price rises in Australia’s two premiere cities have eased, according to a report by Bloomberg.
According to house prices figures from CoreLogic RP Data, house prices in Sydney and Melbourne have skyrocketed 74.6% and 60.8%, respectively, post-GFC. However, in November, house prices fell substantially in both cities. Sydney house prices post a decline of 1.4%, the biggest drop recorded since December 2010, while Melbourne house prices fell by 3.5%.
However, according to Bloomberg, McGrath said buyers from mainland China are starting to look at southeast Queensland where dwelling values are “compelling”.
McGrath also cited sluggish economic growth in China and plummeting stocks as major reasons behind a pull-back in Chinese investment.
“[Chinese buyers] are still there, but it is probably back 10 or 15 percent from where they were a year ago. I think there is a whole combination of things there. The Chinese stock market and so forth.”