Chinese Century Australia

Chinese developers 'walking away' from Australian projects amid lack of finance

www.first2move.com.au 

A landmark Sydney property at Circular Quay, bought by Chinese commercial property giant Dalian Wanda Group, is now flanked by blank hoardings.

At one point they proudly displayed signs of the company's vision for its One Sydney project — a billion-dollar development consisting of two massive towers.

J Capital research managing partner Tim Murray said the party is now over for such China-backed megaprojects.

"Chinese developers that have been overpaying for properties in Australia are now struggling to find the finance to closing those deals and they're actually walking away from large deals and large deposits," he observed.

Chinese authorities, anxious to stem the outflow of money from China and stabilise the yuan, have tightened restrictions on foreign investment by their companies.

The concern is that China's financial stability is threatened by the capital outflows, which are being exacerbated by property developers.

David Chin, the managing director of advisory firm Basis Point, said the Chinese Government regards the overseas property buying spree as irrational.

"Paying money for trophy investments or bragging rights, you know paying over the odds in the expectation that there is more capital coming through. Those days specifically are over," he said.

Hong Kong developer Country Garden paid a record $400 million for this parcel of land on the outskirts of Melbourne, just a few months ago.

There is keen interest in whether any of the planned 4,000 homes will be built soon.

(Source: Australian Broadcasting Corporation)