The Reserve Bank of Australia’s (RBA) governor, Philip Lowe, has issued a dire warning about China’s influence on the Australian housing market.
Lowe told attendees of the RMB Global Cities Dialogue Dinner last week that China has sufficient power and wealth to significantly impact foreign markets, such as Australia.
“Because of China’s size, investment by Chinese entities abroad has the potential to affect the prices of many assets significantly. We have already seen some signs of this with, for example, housing prices in some cities being affected by the inflow of Chinese money,” he said.
His words come after it was revealed that the federal government plans to introduce new laws to put and end to dodgy Chinese deals on Australian property.
Last year alone AUSTRAC, the money laundering watchdog, tracked more than $3 BILLION worth of suspect transactions done by Chinese investors, including $1bn in property deals.
According to the latest figures from AUSTRAC: “70 per cent of Chinese buyers pay in cash and they represent the largest proportion of foreign purchases in the country.”