If Asia’s richest man is any guide, the smart money started leaving China’s property market a year ago.
Hong Kong billionaire Li Ka-shing has sold about $3.5 billion worth of property on the mainland and in Hong Kong since August last year, according to the South China Morning Post.
Analysts say the sales, via the investment company Hutchison Whampoa and some real estate trusts which he part-owns, indicate a concerted strategy to reduce Mr Li’s exposure to the Chinese property market. Li himself doesn’t like the sales to be highlighted.
But he is not alone.
Other big property investors, while not necessarily selling out of China, have certainly been diversifying their portfolios away from its troubled real estate sector. And Australia is among the overseas markets being targeted.
Just last week, it was revealed Wang Jianlin, chairman of Wanda Group and the richest man on the mainland, has committed $1.7 billion to Australian real estate including the construction of a $900 million beachfront resort on the Gold Coast.
Rich Chinese seeking safe haven for their money park funds in Aussie property
CHINA, which took top spot as foreign investor in Australian real estate last year, is expected to see further demand over the next 12 months.
The country is expected to see an annual growth of 20% in outbound real estate investment in the next decade, up from US$11.5bil last year, says Reuters, quoting property agent Savills.
That will help push Chinese demand in Australian property by 15% over the next 12 months, says Reuters, quoting Andrew Taylor, co-CEO of Juwai.com, the largest real estate portal that targets Chinese buyers looking abroad.
Resulting from the boom, Australia’s apartment construction is set to hit record levels by 2017, and remain elevated through to 2020, says Reuters, quoting a CLSA report.
As the corruption crackdown gathers momentum in China, more wealthy Chinese are parking their funds in Australian property which has seen a surge in interest lately, says Reuters.
The priority, apparetly, is not so much on returns, but on finding a safe haven for their funds.
Australia is now the second-most favoured destination for Chinese property buyers, behind the United States but ahead of Canada and Britain, according to Juwai.
Apart from warnings on risky bank lending, the Australian property sector should brace itself for any asset potential bubbles.
The current hot demand from Chinese buyers is set to drive prices further up but planners should look beyond that to achieve a sustainable equilibrium.
China is going ahead with its plan to fortify its banks aginst the risks of a slowing economy. China’s top five banks will raise 128 billion yuan (US$20.8bil) in a two-week bond offering spree, to meet higher capital adequacy requirements under Basel III, says Reuters.
The fundraising spree still leaves China’s top lenders lagging regional counterparts.
Asian banks (excluding Japan and Australia) have raised more than US$32bil in Basel III compliant securities to-date, which includes US$26bil issued in 2014, in local and international markets, says Reuters, quoting Moody’s data.
In view of the trillions of assets held by these large Chinese banks, it is good to note that they are capable of meeting even higher capital adequacy demands, should the need arise.
Perhaps they should look into further topping up of capital adequacy to close in the gap with their regional counterparts.
A problematic transaction monitoring software system at Standard Chartered Plc is causing a backlog of possible anti-money laundering and other criminal activity cases to be reviewed.
That monitoring system was supposed to flag suspect transactions; however, the “detection scenarios” that tell the system what to flag for human review, was not properly calibrated, says Reuters, quoting a source.
Although just “a handful” of the monitoring system’s dozens of detection scenarios were flawed, the errors went uncorrected for years, the source says, adding that people assumed it was being tested.
Many of the scenarios have been corrected and the bank plans to install a new transaction monitoring system.
As it is, the bank clears about US$2mil transactions per month and the process of sieving through past data can be lengthy.
Standard Chartered has been fined a total of US$667mil for violating US sanctions by hiding transactions linked to Iran.
Once again the hard lesson of automation is that it is no guarantee of success.
Human input is still required and, in this case, it was taken for granted that the transactions were tested when the system was still faulty.
Columnist Yap Leng Kuen realises that carelessness in monitoring automated systems can be a costly lesson.
If Asia’s richest man is any guide, the smart money started leaving China’s property market a year ago.
Hong Kong billionaire Li Ka-shing has sold about $3.5 billion worth of property on the mainland and in Hong Kong since August last year, according to the South China Morning Post.
Analysts say the sales, via the investment company Hutchison Whampoa and some real estate trusts which he part-owns, indicate a concerted strategy to reduce Mr Li’s exposure to the Chinese property market. Li himself doesn’t like the sales to be highlighted.
But he is not alone.
Other big property investors, while not necessarily selling out of China, have certainly been diversifying their portfolios away from its troubled real estate sector. And Australia is among the overseas markets being targeted.
Just last week, it was revealed Wang Jianlin, chairman of Wanda Group and the richest man on the mainland, has committed $1.7 billion to Australian real estate including the construction of a $900 million beachfront resort on the Gold Coast.
[/quote]The smart money in China is investing in China mainly the currency. We may see some drips feeding into alternative markets all around the world but the major money is staying in China.
The currency is likely to float in 2015 (or 2016) and then all bets are off for the US bond markets and everything else as the hedgemony position of the US is seriously challenged with the float.
The smart money in China is investing in China mainly the currency. We may see some drips feeding into alternative markets all around the world but the major money is staying in China.
The currency is likely to float in 2015 (or 2016) and then all bets are off for the US bond markets and everything else as the hedgemony position of the US is seriously challenged with the float.
Indeed. The bits of cash coming out are big when you think about it being individuals, but it is a drop in the ocean.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
The currency is likely to float in 2015 (or 2016) and then all bets are off for the US bond markets and everything else as the hedgemony position of the US is seriously challenged with the float.
You mean sink don't you? The Chinese has given up on reporting proper statistics since 2010, I've come to the conclusion that none of this entails progress towards a true float. A true float would now create the mother of all deflation's in China.
The next trick of our glorious banks will be to charge us a fee for using net bank!!! You are no longer customer, you are property!!!
You mean sink don't you? The Chinese has given up on reporting proper statistics since 2010, I've come to the conclusion that none of this entails progress towards a true float. A true float would now create the mother of all deflation's in China.
Please explain.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
The wealthy Chinese will do here the same as they did there. Take a lot of wealth out of the economy and give back very little. It's not like they're coming and setting up factories or anything productive, they're just picking the eyes out of the RE market and sequestering wealth where the Chinese communist party can't get it.
The Japanese did exactly the same thing in the US back in the eighties but on a much bigger scale and the overall effect on the US economy was negligent. There are many different property markets here and I can't imagine Chinese bilionares going out into the sprawling suburbs and bidding up the prices of dogboxes the likes of shadow owns.
Shadow was hopelessly wrong about the Gold Bull Market. What else is he wrong about?
The Chinese central bank doesn't publish their monetary statistics anymore. Even bulletins ceased in 2013. My god even the Argentine central bank produces monetary statistics. It's a pretty bad show from the Celestial Kingdom.
My take, China monetarily is completey f...'d up!
We have no idea how much money China is printing. The Chinese central bank essentially fixes the exchange rate and uses exchange controls. The end result is speculation on the grand scale that is now imploding on the grand scale.
The next trick of our glorious banks will be to charge us a fee for using net bank!!! You are no longer customer, you are property!!!
The chinese have been bidding up some prices here like they have in china, creating an even greater mass of overbuilding than would have been otherwise. Just like in china, they all thought prices were headed to the moon to fever and wanted to jump on the bandwagon too or missout forver. But they are now learning otherwise, they are not going to keep pumping money in when prices are falling, here or there. They will start to pull out rather than lose their money.
But in the meantime , let them create the even greater mass of overbuilding than we would have experienced here otherwise. These buildings are being created for investors to try and rent out while the next generation coming along have no jobs to pay the rent let alone a mortgage .
Prices rose so fast in China many did not even rent them out, or could not rent them out. They have adopted the same thing here thinking prices would rise and it saves them dealing with the tax office and hassles.This is just more property sitting vacant for now that will be unleashed on the market down the line along with the other overbuilding going on.
But as the economy continues on its path to self destruction they will start to sell up on mass , both here and there, rather than lose half their money. And we will be left with 100s of thousands of extra units and houses to rent out and sell to whoever can pay for it or wishes to have there arse burnt as prices decline with the economy, jobs and the money that goes with it.
The currency is likely to float in 2015 (or 2016) and then all bets are off for the US bond markets and everything else as the hedgemony position of the US is seriously challenged with the float.
Strange comment.
US bonds are bought with US dollars. Not sure why the float would impact the US Bond market. Ether way a foreigner must buy (or borrow) US dollars before they buy the bonds.
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