Australian Property Developers Not Worried About China's Crackdown on Outflow of Capital

Chinese investors will continue to put their money in Australian property market even if the mainland will implement measures to control outflow of cash. According to Domain, this is why Australian property developers are not worried by circulating reports that China is restricting outflow of investment funds from the nation. The developers believe that it is only a short-term market regulation but it will not put an end to the influx of investors from China.

National Head of Research Tony Crabb of Savills International said, "The restrictions are just a short-term fluctuation which is the way the Chinese manage their cash flows in and out of the country. It won't be a structural change at all."

He added, "We always see Chinese capital like the 'Whack-a-Mole' game in fairgrounds, where you hit a toy mole with a mallet and it'll pop up somewhere else. You tighten restrictions in one place and capital will just rebound somewhere else instead."

These words came after it had been previously reported that China has begun crackdown on outflow of capital following a $108 billion drop in China's foreign-currency reserves in last month. According to Business Insider, this is the lowest level over a period of three years that has forced the Chinese Central Bank to protect the Yuan. Since then, there have been concerns that China's tighter measures on capital outflow will tremendously cut foreign investments in the Australian property market.

However, CBRE senior managing director Rick Butler of capital markets remains positive and says that there has been no decrease in Chinese investing activities in the Australian property market and there are no signs that it would ever slowdown. Contrary to the news that Chinese people are finding it hard to get money out of the country, Butler said, "We've found the people who want to get money out can get it out in a single moment."