Chinese real estate developers are quickly selling off or downsizing their operations in Australia as the property crisis in China worsens. Giants like Poly Australia, Greenland, Yuhu, Wanda, and Country Garden entered the Australian market in the 2010s with grand ambitions, investing billions in purchasing and developing premium sites. However, due to troubles in their own country, these developers are now pulling out.
The departure of Chinese developers could impact the housing supply in Australia, resulting in a decline in high-density projects. Chinese developers had a tendency to build high-density housing, such as apartment towers, which are expected to see a decrease in the coming years.
The Chinese real estate market has contracted since the second half of 2021 due to measures introduced by the Beijing government to curb the sector. These measures included limiting the amount developers can borrow and reducing levels of bad debt, leading to the bursting of the property bubble.
Chinese developers are facing liquidity issues, prompting them to sell assets in markets where they can still achieve reasonable value, such as Australia. Despite this, Chinese developers claim to be committed to their projects in Australia, but Beijing wants them to focus on the domestic market.
To address the property crisis, China’s central bank has announced easing measures nationwide, allowing homebuyers in first-tier cities to pay only a 30% deposit. However, economists argue that interest rates in China remain too high and suggest further rate cuts.
In conclusion, the property crisis in China has led to Chinese developers selling off or downsizing their operations in Australia, which could impact the housing supply in the country. The Chinese government’s measures to address the crisis are aimed at stimulating the domestic market, but economists believe that further interest rate cuts are needed.
– ABC News: Daniel Irvine, Daniel Hoare
– ABC News: John Gunn