Getting To Know Your Investment Opportunities
China continues to face stock market problems which left investors concerned whether they should continue to invest in such a risky market. There is also the question of whether it is more beneficial to divert investments to other assets or markets. Some will have probably made up their minds as the Chinese market saw more than $3 trillion in capital shed in the past month enough to drive even the most optimistic investors concerned.
Real estate in China blossomed following the rise in construction. However, despite the surge in the industry, the government has changed its approach to such market evidently. The government tried shelving property in an attempt to push stocks more. The administration felt worried about the housing market overheating. To ease the pressure from the real estate market, stocks served as the go-to asset. This resulted to increasing the share market’s market by threefold within three years only. Nonetheless, as stocks now continue to fall, housing may have a more prominent position throughout different portfolios. However, whether the Chinese real estate market will benefit from remains debatable.
On other hand, Chinese investment in Australia’s real estate industry increases by the year. Likewise, there are no signs that it will stop any time soon. Pallier, the principal of Sydney Sotheby’s International Realty, discussed (via The Guardian): “There’s a huge amount of cash sitting in China and I think you’ll find a lot of that comes to the Australian property market.”
Whereas some think that housing prices will continue to rise because of Chinese investors, it is important to note that these concerns have been exaggerated. It depends on a person’s school of thought. While the stock market continues to pose possible threats to the future of Chinese investors, their wealth and investment in Australia, there is an optimistic outlook.
Should prices in Sydney begin to cool then Brisbane benefits eventually. Brisbane’s median house price growth may surpass the national market in 2018. This should be enough reason to think that investments will continue to pour in.
When the Aussie dollar went under $0.75 in the second week of July, the real estate market benefitted. Should the dollar keep falling then foreign investments become cheaper. This in turn will allow Chinese investors to see and look at the Australian real estate sector as a more affordable option for investment.
Mat Spasic from The Daily Reckoning believes these changes are ideal for Australia. According to him: “We don’t have the problem of oversupply to the extent that China does. House prices in Sydney and Melbourne continue to show double digit growth. By contrast, prices across major Chinese cities are trending downwards.”
“All this bodes well for Aussie real estate. The net effects of a Chinese stock market crash could prove to be a major boost for our market.”
What do you think?
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