SINGAPORE/SYDNEY -Real estate agents and property data from Australia to Singapore suggest that the removal of China's strict COVID-19 border controls is causing previously stalled money to start flowing abroad.
Chinese demand is driving up property prices in Singapore, Chinese students are buying up apartments in Sydney and Melbourne, and real estate agents report a rise in Chinese interest in Thailand.
In China, where real estate confidence is shaky and the government's tax laws and criticism of wealth accumulation make investing abroad more appealing, there is a new demand for capital outflows despite the paucity of data on the early trickle of outflows.
According to Ian Chen, founder and CEO of Jalin Realty, which has operations in China, Australia, Malaysia, and Singapore, "Enquiries from regional Asia property investors have doubled since the borders opened, especially from the Chinese,"
"The majority of investors buying at the moment simply need to withdraw some cash." "Although there is not a huge wave, there is interest and a lot of inquiries, particularly from students returning to Australia."
Rich and middle-class Chinese have long sought to transfer some of their wealth abroad to diversify their holdings and keep some assets out of reach of the law in this case.
Early indications point to significantly lower flows than in prior episodes, like the one in 2016 that led to tighter controls on the transfer of money out of China. However, they show that Chinese families are looking to relocate their assets—and even themselves—outside of China in the wake of the pandemic.
Money transfer restrictions will probably prevent a wave of outflows and a significant impact on the second-largest economy in the world, but the trend shows some lack of confidence and weighs on the currency, which has found it difficult to advance as China relaxed its COVID regulations.
Agents claim that recent foreign interest has helped stabilize prices and drive clearance rates in Sydney to a one-year high in February, despite the fact that nationality-specific property data for Australia is not available.
Families and money are moving to Singapore.
Since the pandemic, 300 mostly Chinese clients have hired Joey Wang, a director at CS Corp, an accounting firm that provides migration advice in the city-state. People had plenty of time to consider their futures thanks to COVID and the lockdown, according to Wang.
Despite a sharp increase in real estate stamp duties, the pace of home purchases in Singapore, where Chinese nationals make up the majority of foreign buyers, moderated early in 2023 from the frenetic pace of the previous year.
In response to inquiries from the media, The Singapore American School stated that it has "seen significant interest from Chinese families looking to enrol,"
Canada, another real estate market where Chinese investors are active, has imposed a two-year restriction on foreign buyers. Sales inquiries from China are starting to increase, according to agents in Thailand.
It is unclear whether the 16.2% decline in foreign currency deposits at China's commercial banks over the year through February indicates foreign capital flows.
Consistent net capital outflows through tourism but for other purposes are one "measurement of disguised capital flight," according to analysts at the French bank Natixis, who were referring to larger capital transfers that go along with travel.
Jenny Yan, marketing manager at a Shenzhen company that specializes in purchasing overseas properties, stated that many people have been traveling to Thailand since it reopened and that they will examine the real estate market.
The price of a luxury home in Thailand or Malaysia is about 2 million yuan ($300,000), while an apartment costs about a quarter of that. She claimed that these countries' real estate is even more affordable than that of a third-tier Chinese city.
"With this many people traveling, there will be demand for buying."