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Chinese investors struggle to hold on to property abroad as soaring rates, weak domestic economy make mortgages unaffordable
- Chinese investors who have borrowed from the bank to buy a house abroad are contending with an economic slowdown at home and surging interest rates
- In a growing number of cases they are having to sell their overseas property, unable to free up the funds to service higher mortgage repayments
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Chinese investors who have borrowed from the bank to buy a house abroad are facing a double-whammy as they contend with an economic slowdown at home and surging interest rates across the globe that are hampering their ability to pay for their purchases, according to analysts.
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In a growing number of cases they are having to sell their overseas property, unable to free up the funds to service the higher mortgage repayments.
There is no official data on the number of mainland Chinese selling their foreign real estate, but they are estimated to have doubled from a year ago, according to Juwai IQI, a property technology firm that has more than US$4 trillion of listings.
“Economic slowdowns have a negative impact on the amount of capital available for overseas investment,” said Maggie Hu, assistant professor of real estate and finance at the Chinese University of Hong Kong. “It also affects investor confidence and leads to a more cautious approach to overseas investment.”
These dynamics seem to be playing out for a number of Chinese home owners in Australia, where the central bank has hiked interest rates on 13 occasions since 2022.
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Chinese investors offloading overseas properties
Chinese investors offloading overseas properties
In the popular Sydney suburb of Bondi, known for its famous beach, one Beijing resident had bought a two-bedroom apartment for A$1.3 million (US$848,000) in 2015, according to Peter Li, general manager of Plus Agency, a property company with more than A$200 million in annual sales. They were recently forced to sell – at a significant loss when the costs of renovation work are factored in.
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