Melbourne appears to be the current favourite spot of the Chinese. Chinese buyers have been waning interest in other capitals but Melbourne is becoming the new focal point as Chinese buyers go to great lengths to get into the market.
According to a NAB survey, the total demand of foreign buyers is falling everywhere except in Melbourne, where foreign buyers account for about 9% of demand for established homes. It can also be seen that Melbourne has the largest share of enquiries on Chinese website, Juwai.
Melbourne accounts for 40% of enquiries while Sydney only accounts for 17%. Enquiries for Australian properties on the website have dropped almost 10% in the first six months of the year, compared to the second half of 2016. Yet, it remains the second or third biggest year for enquiries as more peaks are expected in the future.
Chinese who apply for $50,000 a year of foreign exchange quotas are required to sign pledges that the money will not be used to buy properties. The regulation took effect early this year.
Chinese buyers are reportedly smuggling cash in suitcases to buy Melbourne properties and avoid strict capital controls at home. Capital restrictions on money flowing out of China did not affect Chinese interest in investing offshore.
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