<p>Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.</p>

<p>Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;</p>

<p>David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;</p>

<p>“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;</p>

<p>[smartcode_project:default project_id=110291 project_image_fid=302785]</p>

<h2>Affordable product leads, premium demand remains resilient</h2>

<p>Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;</p>

<p>Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;</p>

<p>At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.</p>

<p>Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.</p>

<p>Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;</p>

<p>[smartcode_project:default project_id=148957 project_image_fid=364102]</p>

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

<p>Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.</p>

<p>David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.</p>

<p>“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;</p>

<p>Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.</p>

<p>[smartcode_project:default project_id=108869 project_image_fid=317905]</p>

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

<p>While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;</p>

<p>Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;</p>

<p>However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.</p>

<p>Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;</p>


Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<p><a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.</p>

<p>The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.</p>

<p>Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.</p>

<p>“Brisbane was the right step for Sammut,” Sammut said.</p>

<p>“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”</p>

<p><img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" /></p>

<p>Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.</p>

<p>The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.</p>

<p>“We are DA approved now which is very exciting,” Sammut said.</p>

<p>“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”</p>

<p><img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" /></p>

<p>Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.</p>

<p>“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.</p>

<p>The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.</p>

<p>“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”</p>

<p>The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.</p>

<p>The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.</p>


Sammut secures approval for debut Brisbane apartment development in Toowong

<p>Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.</p>

<p>Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.</p>

<p>The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.</p>

<p>“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.</p>

<p>“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.</p>

<p>“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”</p>

<p>The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.</p>

<p>“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”</p>

<p>From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.</p>

<p>“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”</p>

<p>The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.</p>

<p>“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.</p>

<p>Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.</p>

<p>“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.</p>

<p>“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”</p>

<p>The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.</p>

<p>“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.</p>

<p>Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.</p>

<p>&nbsp;</p>


Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

<p>Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.</p>

<p>The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.</p>

<p>It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.</p>

<p>With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.</p>

<p>“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.</p>

<p>“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”</p>

<p><img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" /></p>

<p>GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.</p>

<p>“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”</p>

<p>Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.</p>

<p>“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.</p>

<p><img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" /></p>

<p>&nbsp;</p>

<p>One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.</p>

<p>Green praised local policy settings.</p>

<p>“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”</p>

<p>One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.</p>

<p>“The way we will be able to achieve economies of scale is through size,” Green added.</p>


One Living enters Sydney's new apartment market with Northern Beaches site acquisition

<p>It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.</p>

<p>Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.</p>

<p>Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be</p>

<p data-end="683" data-start="511">"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.</p>

<p data-end="882" data-start="690">"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."</p>

<p data-end="882" data-start="690">[smartcode_project:default project_id=134646 project_image_fid=6109]</p>

<p>The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.</p>

<p>The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.</p>

<p>Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6110]</p>

<p>Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.</p>

<p>The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6116]</p>

<p data-end="247" data-is-last-node="" data-is-only-node="" data-start="0">While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.</p>

<p>WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.</p>

<p>With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.</p>

<p>[smartcode_project_cta:default project_id=134646]</p>


WM Residences fills gap in Mordialloc townhouse market

China

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<p>GUEST OBSERVER</p>
<p>A QUICK OVERVIEW OF CHINA’S DEBT</p>
<p>International estimates of China’s debt levels vary widely. The Bank for International Settlements (BIS) estimated China’s debt at around 255 percent of GDP in Q1 2016. In contrast, the International Monetary Fund (IMF) recently reported a lower estimate – at around 225 percent of GDP. Both of these measures are based on China’s official Aggregate Financing data – which (as we’ve previously noted) captures only some of the country’s shadow banking sector – the major contributor to debt growth since 2012.</p>
<p>WIDE RANGE OF DEBT ESTIMATES </p>
<p><a href="/images/2016/10/24/Screen%20Shot%202016-10-24%20at%201.07.30%20PM.png" target="_blank">Click to enlarge</a></p>
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<p>Our estimate of debt draws on a broader measure of shadow banking, combined with bank loans and corporate and government bonds. This produces a much larger value for debt– at almost 323 percent of GDP in Q2 2016 – a level that places China among the highest debt advanced economies – an unprecedented position for a still developing economy. Risks related to shadow banking are distributed unevenly across the financial sector – with the IMF reporting that smaller banks are far more exposed (in terms of capital buffers) than the big four state-owned banks.</p>
<p>The majority of the debt sits in China’s corporate sector, particularly State-Owned Enterprises (SOEs), which effectively ties the strategies of authorities in managing the debt to the broader challenges of SOE reform. Misallocation of debt to SOEs has contributed to excess production capacity in a number of sectors – particularly heavy industry – as well as expanding the debt-to-GDP ratio.</p>
<p>Standard &amp; Poor’s notes that China’s private sector leverage declined in 2015, while SOE leverage continued to grow. Median SOE debt levels in 2015 were six times earnings (EBITDA), meaning that a large amount of cash flow would be required to service debt, reducing the amount available for re- investment or debt reduction.</p>
<p>DEBT BY SECTOR </p>
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<p>Earlier this year, the IMF estimated that the potential losses from the corporate loan portfolios of China’s banks could be around 6.9 percent of GDP – an estimate that the organisation described as conservative, given that it excluded potential additional risks related to shadow banking exposures.</p>
<p>WARNING SIGNS DON’T GUARANTEE</p>
<p>CRISIS</p>
<p>In many respects, China’s financial system is shielded in ways other countries are not – allowing credit to accumulate rapidly (near or above the BIS danger level since 2009) without yet enduring a crisis. Domestic banks are relatively well capitalised, maintaining an internationally high reserve ratio (as mandated by Chinese authorities) and have a strong deposit base.</p>
<p>This means that banks are less reliant on international wholesale funding – which has a tendency to be withdrawn during periods of high risk concerns – while remaining capital controls restrict the capacity of residents from migrating their wealth (albeit not completely prevent it, as capital outflows in recent years demonstrate).</p>
<p>That said, the stability of funding is beginning to weaken – with banks increasingly using the short term interbank market. According to IMF’s October Global Financial Stability Report, wholesale funding (primarily domestic interbank and repo markets) provided over 30% of total bank funding in 2015, up from around 18% in 2014, with smaller banks particularly reliant on these sources. The short term nature of this funding is mismatched to the longer term loans to corporates.</p>
<p>CHINA’S FUNDING STABILITY DECLINING </p>
<p><a href="/images/2016/10/24/Screen%20Shot%202016-10-24%20at%201.11.20%20PM.png" target="_blank">Click to enlarge</a></p>
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<p>Despite the relatively shielded nature of the financial sector, these characteristics do not mean that China’s government can afford to ignore the debt issue (particularly as funding stability declines), but provides them with some time to appropriately address it. </p>
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<p>HOW CAN CHINA ADDRESS THE GROWING </p>
<p>DEBT RISK? </p>
<p>In the short term, Chinese authorities should seek to control, rather than reduce the debt-to-GDP ratio – as severe cuts to credit necessary to produce the latter would likely lead to a sharp slowdown in economic growth. Standard &amp; Poor’s estimates that banks would require around RMB 11.3 trillion in recapitalisation if current credit growth rates persisted for the next five years. Controlling the debt issue will require increasing the efficiency of lending, particularly reducing the share of funding directed to SOEs. </p>
<p>The IMF note a range of measures that Chinese authorities should consider – noting that a comprehensive response to the debt issue, while it is still manageable, offers the greatest chance for success. These include imposing harder budget constraints on SOEs, restructuring or liquidating highly indebted firms and managing losses across a range of parties, including the government where necessary. The IMF also recommends introducing social assistance for displaced workers and encouraging the entry of private firms across the economy. </p>
<p>Plans to restructure SOEs have focussed largely on mergers and partial privatisation. Allowing firms to swap debt for equity (a policy approved by China’s State Council in early October) is one way to address the debt issue, but poorly performing, highly indebted firms are unlikely to be attractive opportunities for investors – particularly those still scarred by the 2015 share market bubble burst. Similarly there are concerns that banks could be forced to swap bad loans for equity in so-called zombie firms, achieving little in terms of restructuring. Harder decisions around the weakest SOEs – including liquidation – must be considered. This would require the development of a sound and consistent bankruptcy framework understood by all market participants. </p>
<p>Greater competition is also a way to improve the efficiency of lending – particularly if banks are incentivised to lend to more innovative private sector firms. SOEs continue to enjoy preferential barriers to entry in a range of industries – including fast growing service sectors such as communications. Greater market access for private banks in the finance sector would likely contribute to reducing SOEs share of corporate debt – as profit rather than relationships would likely drive lending decisions. </p>
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<p>Warnings from the BIS and IMF have elevated concerns around China’s corporate debt levels. While the nature of China’s financial markets provides authorities with some additional time to address the issue, urgent reform to SOEs and increased competition across the economy will be necessary to avoid a medium term financial crisis. </p>
<p>Gerard Burg is senior economist, Asia for NAB and can be contacted <a href="https://www.nab.com.au" target="_blank">here</a>.</p>
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jchancellor-FAypfDUnLy

China’s authorities must manage debt to avoid a financial crisis

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<p>As in other emerging market economies, incomplete information prevents a full assessment of the fiscal buffers in China, according to IMF's latest report.</p>
<p>However, preliminary estimates suggest the general government’s net financial worth could range between 0 and a negative 23 percent of GDP, better than that in other emerging market economies.</p>
<p>Nonfinancial assets may provide additional buffers, but the extent of contingent liabilities and age-related spending increases are important sources of vulnerability.</p>
<p>With high and rising corporate debt and potential contingent liabilities from the financial sector and state-owned enterprises (IMF 2016d), it is important to assess the strength of the general government’s balance sheet in China to facilitate a necessary adjustment.</p>
<p>While it is often difficult to estimate the general government’s net financial worth in emerging market economies given the dearth of information especially on the asset side, in the case of China, shortcomings in data on the fiscal accounts and an intricate network of cross-financing make this task particularly challenging:</p>
<p>• Liabilities. Until recently, a significant amount of liabilities associated with off-budget local infrastructure spending, which benefited from implicit or explicit government guarantees, was not included in debt aggregates. Under the 2015 budget law, aimed at improving transparency of local government finances, about 20 percent of GDP of these liabilities have been explicitly recognized as part of China’s general government debt, resulting in a doubling of the debt ratio. An additional 12 percent of GDP has been recognized as contingent government liabilities. Nevertheless, there may be other off-budget contingent liabilities incurred in 2015, estimated at 5 percent of GDP, that have yet to be acknowledged.</p>
<p>• Assets. Available estimates suggest that the general government’s largest financial asset is related to its participation into state-owned enterprises (Chinese Academy of Social Science 2015; Xu and Zhang 2014; People’s Bank of China), but detailed data about the government’s total holding of equity in state-owned enterprises is not publicly available.</p>
<p>A first attempt to estimate the general government’s net financial worth suggests that it is between a positive 3 percent and a negative 23 per- cent of GDP, better than the negative 24 percent on average in other emerging market economies (Figure 1.1.1). In particular, at the end of 2015, financial liabilities amounted to 38–55 percent of GDP (depending on whether off-budget and contingent liabilities are included).</p>
<p>Financial assets (comprising deposits in financial institutions—5 percent of GDP—and equity holdings in state-owned enterprises) are estimated at between 32 and 41 percent of GDP. This wide range is related to significant uncertainties regarding the valuation of state-owned enterprises, as many of them are not traded.</p>
<p><a href="/images/2016/10/24/China.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/24/China.jpg" alt=""></p>
<p>On the basis of these enterprises’ net asset positions, the government’s equity holdings could be worth around 36 percent of GDP.2 A more conservative assumption based on their profitability would reduce this estimate to 27 percent of GDP.</p>
<p> The general government’s net financial worth may not, however, give a full picture of the available buffers. Ideally one would like to look at the public sector (including the central bank), but limitations of available data on public corporations, including estimates of the value of implicit government guarantees, preclude a full assessment.</p>
<p>In addition, other nonfinancial assets and other contingent liabilities of the general government should be accounted for. For example, the value of land ownership (a nonfinancial asset) estimated by computing the net present value of net use right fees for the next 25 years could be up to 51 percent of GDP. On the other hand, under current policies, estimated increases in age-related spending (following the methodology in Clements and others 2015) would amount to 128 percent of GDP in net present value terms.</p>
<p>Also, contingent liabilities such as potential losses on corporate loans from rapid and inefficient credit expansion may put further pressure on the fiscal accounts (April 2016 Global Financial Stability Report). Additional losses can be expected in other parts of the financial system, especially in shadow credit products.</p>
<p>Limited information makes it difficult to manage risks and can lead to markets’ overreaction to policy changes. From that perspective, a priority for China should be to strengthen its fiscal risk analysis and management framework, starting with a clear and transparent identification of assets, liabilities, and exposures.</p>
<p>Full implementation of the 2015 budget law would be a step in this direction. Once risks are identified and quantified, tools to mitigate risks (including limits on exposures, regulations, and a mechanism to transfer risks) could be considered, along with decisions about risk provisions, contingency budgeting, and buffer funds.</p>
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j.ballantyne1990-6AQqhLzZaK

What we know about the general government’s balance sheet in China: IMF

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<p>Chinese developers are now in a better place to repay existing debt due to improved access to credit, robust housing sales in upper tier cities and increased 'destocking' in lower tier cities, according to a new report from CBRE.</p>
<p>The report, China Real Estate Debt: An Assessment of Credit Risk in the Chinese Property Market also stated smaller developers remain challenged.</p>
<p>Dr Henry Chin, head of research for CBRE Asia Pacific said developers are positive on the longer-term prospects of China’s real estate sector in upper tier cities despite the cloud of rising debt levels.</p>
<p>"Supported by the introduction of more transparent financing channels, improving bank lending underwriting critieria and a revival of the national housing market in upper tier cities, much of the systematic risk in the real estate sector has been mitgated,” said </p>
<p>Canon Yau, senior director, Capital Advisors, CBRE Asia Pacific said despite the availability of alternative domestic financing channels in China, developers should be prepared for the possibility of future policy changes as well as an interest rate reversion that may subsequently impact their cost of capital and debt maturity exposure.</p>
<p>“For small and medium-sized developers, we advise a longer-term view on refinancing plans by exploring strategic partnerships or forming joint ventures with investors to reduce concentration risk.</p>
<p>"As the government seeks to create more transparent financing channels, the introduction of asset backed securitization markets will provide opportunities for property companies to expedite the repatriation of funds," he said.</p>
<p>“For small and medium-sized developers, we advise a longer-term view on refinancing plans by exploring strategic partnerships or forming joint ventures with investors to reduce concentration risk.</p>
<p>"As the government seeks to create more transparent financing channels, the introduction of asset backed securitisation markets will provide opportunities for property companies to expedite the repatriation of funds."</p>
<p>CBRE’s report reveals that, despite favorable funding conditions, potential risk factors still remain in China’s real estate debt market which include the developers’ ability to repay debt, sustainability of residential sales, postponing rather than resolving debt and over-leveraging among regional developers.</p>
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jonathanchancellor-7SQnKwU6yx

Improving credit landscape driving Chinese developers: CBRE

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<p>Knight Frank has published its third Chinese Outbound Real Estate Investment Report titled Changing Currents, Rising Tides.</p>
<p>Riding on last year’s strong momentum, the waves of Chinese outbound capital continued in major real estate markets around the world in H1 2016, with more to come through the rest of the year.</p>
<p>Global gateway locations have seen undiminished interest from Chinese investors, who are driven by Chinese economic and policy factors and are attracted by favourable local market conditions in gateway cities.</p>
<p>China’s capital outflow control has been a push factor so far, but it could prove to be a double-edged sword.</p>
<p>Stringent requirements have made it difficult for some investors to secure foreign exchange clearance.</p>
<p>According to Knight Frank’s Head of Research and Consulting, Australia Mr Matt Whitby, “The volume of Chinese investment in Australia is down considerably year-on-year because of a lack of mega-deals in the first half, as large deals such as the Investa portfolio dragged the 2015 number higher.</p>
<p>“Amid competition from other Asian buyers, however, there is a strong Chinese appetite for en-block commercial properties in both Sydney and Melbourne, attracted by rental growth supported by strong tenant demand and a supply shortage,” said Mr Whitby.</p>
<ul>
<li>Chinese capital outflow continued strongly in H1 2016, with a total of US$10.7 billion invested. Although showing a 13.6 percent drop compared to H1 2015 this should be considered in the context of some of the biggest real estate deals in Chinese outbound investment history early last year, such as the US$1.9 billion purchase of New York’s Waldorf Astoria Hotel. While overall investment is somewhat softening, we saw strong growth of Chinese capital inflow in a number of key gateway cities.</li>
</ul>
<ul>
<li>
<strong>In </strong>Australia, with the absence of mega-deals such as last year’s CIC’s record breaking purchase at US$1.8bn for an office portfolio, the volume of office deals dropped 65 percent and hotel deals dropped 42% YoY. Investment in development sites stabilised. Nonetheless, Chinese and other Asian capital remain drawn mainly to Sydney and Melbourne’s office markets given their short supply and rental growth prospects. One important observation is that Chinese developers are now looking to diversify into income producing properties.</li>
</ul>
<ul>
<li>In Australia<strong>, </strong>Chinese investors and developers spent US$1.7bn in Australia in 1H 2016 – a 37 percent decline year-on-year. With the absence of mega deals, such as CIC’s record-breaking purchase at US$1.8bn for an office portfolio (AUD2.45bn), the volume of office deals dropped 65% and hotel deals dropped 42% year-on-year. Meanwhile, investment in development sites stabilised.</li>
</ul>
<ul>
<li>Chinese outbound investment as a whole was gaining momentum as we crossed the half-year mark, with the biggest push coming from the Chinese economy itself. Global gateway locations have seen undiminished interest from Chinese investors, helped by favourable local market conditions like market depth, rental growth prospects, and in the case of London, a cheaper UK pound.</li>
</ul>
<ul>
<li>However there are challenges ahead. China’s capital outflow control was designed to prevent the erosion of the country’s vast foreign exchange reserves, but its stringent requirements have made it difficult for some investors, mainly smaller ones, to obtain foreign exchange clearance. Some sizeable investors have invested through overseas subsidiaries, but these subsidiaries may run out of funds if the grip on foreign exchange reserves is not loosened.</li>
</ul>
<p>According to Knight Frank’s Head of Asian Markets, Australia Dominic Ong, “Chinese and other Asian capital continues to be drawn mainly to the office markets in Sydney and Melbourne. Tenant demand from various sectors remains strong, but lack of supply has caused rents in both cities to rise and vacancies to fall. Yields, meanwhile, have been tightening, but are still above long-term bond yields.</p>
<p>“Fewer buying opportunities, coupled with the positive rental outlook, have already attracted large Chinese private developers such as Poly Group and Shanghai Shenglong to the office market. Since June there have been a number of major deals in the making, which will underpin the investment market outlook for 2016.</p>
<p>“Activity has picked up in the past few months. Some of the most recent transactions in Australia from Chinese buyers include 15 Help Street, Chatswood which sold for AUD43.8m to One Pro Investment Group; 20 Bridge Street, Pymble which sold for AUD78m to YuHu; 210 George Street, Sydney sold for AUD160m to Poly Group; and 61 Lavender Street, Milsons Point sold to Aqualand for AUD110m,” said Mr Ong.<strong><br><br></strong><a href="/images/2016/10/19/Chinese%20investment%20in%20major%20gateway%20cities.jpg" target="_blank">Click to enlarge</a></p>
<p><strong><br></strong><img src="/images/2016/10/19/Chinese%20investment%20in%20major%20gateway%20cities.jpg" alt=""></p>
<p>Mr Whitby said, “The US is now firmly established as the most important destination for Chinese capital, having attracted US$5.1 billion worth of Chinese investment in H1 2016, up 21 percent year-on-year (YoY).</p>
<p>“The Australian market meanwhile showed a 37% YoY decline due to the absence of mega-deals we saw last year.”</p>
<p>Paul Hart, Executive Director, Greater China at Knight Frank said, “Meanwhile, Chinese investment in the UK showed an impressive YoY increase of 75 percent in H1. The interest in the British capital has not diminished even after the Brexit vote as the market saw a number of major transactions taking place since then. Closer to home, Hong Kong saw US$1.68 billion worth of Chinese investment in H1, a minor volume drop YoY. However we have seen a number of large deals since July which will enhance the whole year result.”</p>
<ul>
<li>In the US, New York attracted 80% of Chinese investment in the US. A large share of this (62 percent) was in office deals, as Chinese institutional capital continued to chase trophy assets. Major hubs on the west coast, such as San Jose and Seattle, also drew interest from Chinese investors. As the Fed-led low interest-rate environment persists, Chinese investors will continue to favour tangible assets such as real estate.</li>
</ul>
<ul>
<li>In the UK, the economy’s perceived stability and London’s status as an international financial centre contributed to the UK’s 75 percent YoY increase in Chinese investment before Brexit. Private banks and conglomerates became a key part of the investment landscape, which was previously dominated by large insurance companies. Chinese investors’ interest in the city seemed unabated after Brexit, with a number of major office transactions completing since July.</li>
</ul>
<ul>
<li>Hong Kong has attracted Chinese investors thanks to increased financial cooperation and its position as the international financial centre closest to China mainland. Currency and stock connect schemes between Hong Kong and the Mainland attracted new investor and tenant demand. Owning office space is an attractive option due to Hong Kong having the world’s highest office rents. Meanwhile, the city’s residential land market also offers better value than some hotly-contested Chinese markets.</li>
</ul>
<ul>
<li>Feeling the pressure from the RMB’s steady devaluation against the US dollar, Chinese investors, particularly private conglomerates, have tended to invest aggressively in hard assets. The demand for real estate has coincided with strong appetite in other investments.</li>
</ul>
<p>Bunny Wang, Senior Director, Head of International Capital Markets and International Project Marketing, China, Knight Frank, believes that Chinese investors will continue to be interested in the traditional gateway markets.</p>
<p>She notes that the buying spree that resulted from the RMB’s steady devaluation against the US dollar bodes well for gateway markets, at least in the short term.</p>
<p>Furthermore, despite talk of a prolonged slowdown, China’s GDP growth has stabilised at above 6.5 percent.</p>
<p>She believes one of the main ways the central government will achieve its GDP growth target is through infrastructure investment and real estate market-led consumption.</p>
<p>Given the highly competitive domestic real estate market, many investors and developers are keen to diversify their investment overseas.</p>
<p>David Ji, Director and Head of Research and Consultancy, Greater China at Knight Frank, believes that China’s capital outflow control could present some risks.</p>
<p>Stringent requirements for foreign exchange clearance aside, he believes that the prospect of high land prices in the country’s major cities would encourage the seeking of overseas opportunities.</p>
<p>But the complicated processes and planning issues in gateway markets could diminish the willingness of Chinese investors to explore those markets more deeply.</p>
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Chinese real estate investment in Australia was down YoY, however activity has recently picked up again

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<p>Riding on last year’s strong momentum, the waves of Chinese outbound capital continued in primary real estate markets around the world in the first half of 2016, according to Knight Frank.</p>
<p>Looking at the total volume, the US$10.7 billion invested actually represents a 13.6 percent drop compared to the same period last year.</p>
<p>But this should be considered in the context of some of the biggest real estate deals in Chinese outbound investment history early last year, such as the US$1.9 billion purchase of New York’s Waldorf Astoria.</p>
<p>Nevertheless, Chinese investment was gaining momentum as we crossed the half-year mark. Since June there have been deals in the making that promise to turn 2016 into another productive year.</p>
<p><a href="/images/2016/10/19/Chinese%20global%20real%20estate.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/19/Chinese%20global%20real%20estate.jpg" alt=""></p>
<p>The US market attracted US$5.1 billion worth of Chinese investment in the first half of the year, up 21 percent year-on-year (YoY).</p>
<p>Chinese investors, like most international investors, are again focusing primarily on the major markets, especially New York, which attracted 80 percent of Chinese investment in the US. Remarkably, the amount of Chinese capital invested in New York from January to June was equivalent to 81 percent of Chinese capital invested in the city in all of 2015.</p>
<p><a href="/images/2016/10/19/Top%20Chinese%20real%20estate.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/19/Top%20Chinese%20real%20estate.jpg" alt=""></p>
<p>A large share of this (62 percent) was in office deals, as Chinese institutional capital continued to chase trophy assets. A joint venture involving China Life, for example, bought the PaineWebber Building in New York for US$1.65bn. Both CIC and HNA group also splashed out on New York offices this year.</p>
<p><a href="/images/2016/10/19/Sector%20share.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/19/Sector%20share.png" alt=""></p>
<p>Major hubs on the west coast, such as San Jose and Seattle, also drew interest from Chinese investors, particularly hi-tech-related development sites and industrial properties. For example, LeEco acquired the former Yahoo site, where it reportedly plans to set up regional headquarters.</p>
<p>As the Fed-led low interest-rate environment persists, Chinese investors, like all investors chasing yield, will continue to favour tangible assets such as real estate in the next few years. Added to this is the slow devaluation of the renminbi against the US dollar, which has resulted in a sense of urgency for Chinese investors to invest in USD-denominated assets.</p>
<p><a href="/images/2016/10/19/Location%20share.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/19/Location%20share.jpg" width="400"></p>
<p>Some investors may wait for the coast to clear regarding the presidential election, but barring a major political upset, the US should see slow but stable GDP growth of around 2 percent, according to IMF’s latest forecast. This will put the US ahead of other developed countries, where the danger of a recession continues to linger.</p>
<p>Added to this advantage is the significant market depth, not just in New York, but in a score of coastal hubs and high-tech centres, making the US the foremost investment destination 2,700 for Chinese capital.</p>
<p><a href="/images/2016/10/19/Chinese%20real%20estate.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/19/Chinese%20real%20estate.jpg" width="400"></p>
<p>In the six months leading up to the Brexit vote, London, which drew the lion’s share of Chinese investment in the UK, saw a number of large en- block deals, which contributed to the US$1.7bn in total volume, a whopping 75% uptick year on year.</p>
<p>Even though there were only a limited number of transactions, London’s status as a key international financial centre and the perceived stability of the UK economy definitely contributed to this tremendous growth.</p>
<p><a href="/images/2016/10/19/Top%20Chinese%20real%20estate%202.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/19/Top%20Chinese%20real%20estate%202.jpg" alt=""></p>
<p>One interesting aspect of these deals is that private banks, developers and conglomerates such as Baosheng Bank and Fosun became noticeable part of the investment landscape, which was crowded last year with major Insurance companies. This is partly because they are able to make decisions more quickly. They tend to favour the City and West End over Canary Wharf, partly because of pricing.</p>
<p>Even after the Brexit vote, Chinese investors’ interest in London seems undiminished, as there have been a few major office transactions since July. For example, through its majority-controlled SRE group, China Minsheng Investment Corp, said to be China’s largest private investment conglomerate, bought Societe Generale’s London headquarters for GBP84.5 million (US$110 million) in September. Meanwhile, Vanke reportedly bought London’s Ryder Court for GBP115 million (US$149 million) through Hong Kong-listed Vanke Overseas.</p>
<p><a href="/images/2016/10/19/Chinese%20real%20estate%202.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/19/Chinese%20real%20estate%202.jpg" width="350"></p>
<p>While economists have torn up their previous forecasts of a UK recession, the negotiation process for Brexit will still mean increased political uncertainty in the short term.</p>
<p>During this period we expect overseas buyers to focus on Central London, particularly districts popular with technology and media firms, instead of looking at the wider UK. The fall in the value of the pound and recent yield softening has made London more attractive than some other global hubs.</p>
<p>Chinese investors and developers spent US$1.7bn in Australia in H1 2016, a 37 percent decline YoY. With the absence of mega-deals, such as CIC’s record breaking purchase at US$1.8bn for an office portfolio, the volume of office deals dropped 65 percent and hotel deals dropped 42 percent YoY. Meanwhile, investment in development sites stabilised.</p>
<p>Despite this, Chinese and other Asian capital continues to be drawn mainly to the office markets in Sydney and Melbourne. Tenant demand from various sectors remains strong, but lack of supply has caused rents in both cities to rise and vacancies to fall. Yields, meanwhile, have been tightening, but are still above long-term bond yields.</p>
<p><a href="/images/2016/10/19/Top%20Chinese%20real%20estate%203.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/19/Top%20Chinese%20real%20estate%203.jpg" alt=""></p>
<p>Fewer buying opportunities, coupled with the positive rental outlook, have already attracted large Chinese private developers such as Poly Group and Shanghai Shenglong to the office market. Since June there have been a number of major deals in the making, which will underpin the investment market outlook for 2016.</p>
<p><a href="/images/2016/10/19/Top%20Chinese%20real%20estate%203.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/19/Chinese%20real%20estate%205.jpg" width="400"></p>
<p>Despite its relatively smaller market, Hong Kong has attracted Mainland investors because of its role as the international financial centre closest to the Mainland and the increased financial cooperation between the two sides.</p>
<p><a href="/images/2016/10/19/Chinese%20real%20estate%204.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/19/Chinese%20real%20estate%204.jpg" width="350"></p>
<p>In H1 2016, Hong Kong attracted over US$1.68bn worth of Chinese investment, down only 9% from the US$1.86bn recorded in the same period last year.</p>
<p>Since last year, a series of currency and stock connect schemes between Hong Kong and the Mainland have attracted new tenant demand from across the border. As Hong Kong office rents remain the highest in the world, any opportunity to own a trophy Grade A office asset in the CBD cannot be ignored.</p>
<p>Following Evergrande’s US$1.6bn purchase of the MassMutual building last year, Everbright group dished out US$1.28bn on the Dah Sing Financial Centre in H1 2016. In July, Cheung Kei Group, a private developer from Shenzhen, bought the East Tower of One Harbour Gate in Kowloon for US$580 million.</p>
<p><a href="/images/2016/10/19/Top%20Chinese%20real%20estate%204.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/19/Top%20Chinese%20real%20estate%204.jpg" alt=""></p>
<p>Thanks to the severe shortage of en-block Grade A office buildings for sale, any property offered for sale is guaranteed to attract Mainland institutional investors and prominent developers, who are willing to pay higher prices.</p>
<p>The Hong Kong residential land market also offers better opportunity than some of the hotly contested Mainland markets. As witnessed in a recent land auction, Mainland developers are prepared to pay a higher premium in order to secure market share in the city and take advantage of anticipated growth in residential prices.</p>
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Chinese outbound real estate investment changing currents, rising tide: Knight Frank

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<div class="column">GUEST OBSERVER</div>
<div class="column"> </div>
<div class="column">Financial stability has become more important to the RBA, with an increased emphasis on financial stability in the updated policy agreement with the Treasurer.</div>
<div class="column"> </div>
<div class="column">In the Financial Stability Review, the RBA is more worried about the rapid growth in the already high level of debt in China, where our recent analysis highlights the downside risk this poses to Australia’s outlook.<br><p>The RBA thinks local banks are in good shape, where household-related risks have “lessened a little” since April. The RBA thinks risks have increased for property development, particularly given the huge increase in the supply of apartments in Brisbane and Melbourne, and mining-related areas.</p>
<p>The main points from the Financial Stability Review were:</p>
China’s high and rapidly rising debt is a key concern.</div>
<div class="column"> </div>
<div class="column">The “potential for a disruptive adjustment in China remains pronounced, given the ongoing increase in debt [is occurring] at a time when the pace of economic growth has [slowed]”. The financial system has become “increasingly large, opaque and interconnected” and easier policy aimed at stabilising the economy has fuelled the rapid growth in debt. China still has policy options to boost growth, but many of these would likely boost debt further, which “could increase the risks to longer-term reform and stability”.</div>
<div class="column">
<br>European and Japanese banks remain under pressure.</div>
<div class="column"> </div>
<div class="column">European banks are struggling given low profits, bad debts, and weak stock prices. Low/negative rates are pressuring net interest margins for banks in Japan and other advanced economies.</div>
<div class="column">
<br>Australian banks are performing well and remain “resilient to possible shocks”. Local banks have high capital and leverage ratios and have strengthened their liquidity positions. Banks have scaled back some international exposures and their exposure to the mining-related sector is small and falling (Asian bank balance sheets are the ones most exposed to mining and commercial property). Bad debts are up from low levels, mainly reflecting lending to households and companies in mining areas and the New Zealand dairy sector.</div>
<div class="column">
<br>Risks related to households have “lessened a little” since April given improved serviceability metrics, tighter lending standards, and slower growth in credit. Even so, the RBA notes that: 1) house prices are up “a little” in recent months in Sydney and Melbourne; 2) the ratio of debt to income is up; and 3) non-performing home loans have increased in mining areas, which are a small part of bank mortgage books.<br><p>Local risks are centred on property development and mining areas.</p>
<p>The risks relate to: 1) the huge increase in the supply of apartments in Brisbane and Melbourne over the next couple of years; and 2) the search for yield boosting Sydney and Melbourne commercial property, and resource-related weakness in Perth and Brisbane.</p>
<p>For apartments, there are signs of longer settlement times and valuations falling below contract prices, while developers expect settlement failures will increase. Assessing the health of developers is hard because of the importance of unlisted and foreign developers.</p>
<p>Banks have tightened up on: 1) lending to borrowers who rely on foreign income, which may weigh on demand in the short term; and 2) property developers, which could help forestall future oversupply, although some developers are turning to non-banks. For commercial property, the RBA is worried that the current low level of yields may prove unsustainable if global interest rates rise and/or foreign demand declines.</p>
<p>The RBA also notes that APRA is reviewing bank commercial property lending practices, including for residential development, with the aim of improving lending standards. </p>
<p><em>Kieran Davies is an economist for ANZ and can be contacted <a href="https://www.anz.com/personal/" target="_blank">here</a>.</em></p>
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RBA sees Chinese and Australian apartments risks to financial stability: ANZ

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<p>Two in five Hongkongers would emigrate if they got the chance with Australia the second most preferred destination, a survey has found.</p>
<p>The Hong Kong Institute of Asia- Pacific Studies of the Chinese University of Hong Kong conducted a telephone survey of 710 people aged 18 or above to gauge public views on emigration.</p>
<p>It found 39 percent indicated they wanted to emigrate with 11 percent of this group were taking action to make preparations.</p>
<p>The most preferred destinations, ranked by popularity, were Taiwan, Australia and Canada, according to the survey.</p>
<p>Dissatisfaction with governance was the major factor as to why people wanted to leave with 11 percent reflecting they were unhappy with the government, chief executive or high-ranking officials when asked about their intention to emigrate.</p>
<p>Overcrowded living conditions came second with 10 percent, followed by too much political dispute or social cleavage and slow economic growth or bad economic prospects.</p>
<p>The survey also found that 57 percent of those who had a tendency to leave the SAR were youths, aged 18 to 30 - then 26 percent being aged 51 or older. </p>
<p>Eddie Kwan King-hung, founder of EK Immigration Consulting, said he has observed more emigration inquiries in the past two to three years, especially after the Occupy protests in 2014.</p>
<p>However, he said not many people could meet the requirements set by the popular destinations noting Australia currently takes immigrants with a Significant Investor Visa with a requirement of at least A$5 million (HK$29 million).</p>
<p>Kwan said Taiwan has become Hongkongers' new favorite place as there is almost no language barrier, and the island only requires an investment of NT$6 million (HK$1.5 million), sufficient for operating businesses such as a bed and breakfast or restaurants.</p>
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Australia second most preferred destination of Hongkongers

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<p>A survey by <span>Chinese international property portal Juwai.com has discovered h</span>ow much international real estate professionals and agents really know about China and Chinese buyers, polling 1,402 international real estate professionals from 63 nations to find out.</p>
<p>According to Juwai international agents already working with Chinese buyers do have some basic knowledge of the country and can identify the Chinese flag (84 percent did so correctly) and the president’s face (75 percent did so), and they know that the US is the most popular country for Chinese buyers (67% were correct) .</p>
<p><a href="/images/2016/10/04/Screen%20Shot%202016-10-04%20at%202.32.47%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/04/Screen%20Shot%202016-10-04%20at%202.32.47%20PM.png" alt=""></p>
<p>The survey said nearly 10 percent of respondents believe that the current leader of China is Kim Jong-un (who is actually the current dictator of N. Korea) or Mao Zedong (the founder of the People’s Republic of China, who died in 1976).</p>
<p>Juwai.com president of the Americas Matthew Moore said the overall correct answer rate was 48 percent, but in Canada it was only 50 percent.</p>
<p>"Canada did OK, but not that well considering it is a top five country for Chinese investment," he said.</p>
<p><a href="/images/2016/10/04/Screen%20Shot%202016-10-04%20at%202.35.03%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/04/Screen%20Shot%202016-10-04%20at%202.35.03%20PM.png" alt=""></p>
<p> "Real estate professionals in Cyprus, Turkey, France and Germany did better than those in Australia.   </p>
<p>“Australia was only the ninth-ranked country, in terms of the knowledge its international real estate professionals have about the Chinese buyers.   </p>
<p> "That said, Australians did better than agents of other English-speaking countries, like New Zealand, the UK, the US and Canada.   </p>
<p> "The countries that ranked best are located in Asia, of course. The second-best ranking countries were in Europe. English-language countries like Australia ranked third.   </p>
<p>“It's true that being able to recognize the Chinese flag might not make much of a difference when it comes to successfully working with Chinese buyers. But we find these simple questions are an indicator of whether real estate professionals have invested time and energy in learning about and building relationships with potential buyers from China.    </p>
<p>“Being able to understand and relate to the buyers that operate in your market is vitally important."</p>
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Aussie agents wising up to China and Chinese buyers

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<p>Chinese billionaire Wang Jianlin has issued a warning on the Chinese property market.</p>
<p>It's the "biggest bubble in history," he told CNNMoney.</p>
<div id="ie_column">The problem, according to Wang, is that prices keep rising in major Chinese metropolises like Shanghai but are falling in thousands of smaller cities where huge numbers of properties lie empty.</div>
<p>"I don't see a good solution to this problem," he said.</p>
<p>"The government has come up with all sorts of measures -- limiting purchase or credit -- but none have worked."</p>
<p>"The problem is the economy hasn't bottomed out," Wang said.</p>
<p>"If we remove leverage too fast, the economy may suffer further. So we'll have to wait until the economy is back on the track of rebounding -- that's when we gradually reduce leverage and debts."</p>
<p>He says he's not worried about<span> </span>the prospect<span> </span>of a "hard landing".</p>
<p><span style="font-size: 12.16px; line-height: 1.3em;">Wang has been warning of trouble in the Chinese property market for a while with his Dalian Wanda Group, which has developed huge malls and office complexes across China, has been gradually cutting back on its real estate business.</span></p>
<p>His business has key property assets overlooking Sydney Harbour at Circular Quay and on the Queensland Gold Coast.</p>
<p><span>Wang is the richest man in China, according to Forbes and Hurun Report data from 2015.</span></p>
<p><a href="https://money.cnn.com/2016/09/28/investing/china-wang-jianlin-real-estate-bubble/" target="_blank">Click here to see his full video interview.</a></p>
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Chinese billionaire Wang Jianlin issues biggest housing bubble warning

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<p>In July, China tier-1 property prices saw a further moderation in the pace of annual price growth; in tier-2 and tier-3, growth (again) inched higher, remaining at a much lower level than tier-1.</p>
<p>For new housing, 51 cities reported price gains in the month of July, down from 55 in June and a peak of 65 in April. But that is still well up on the number of cities reporting monthly gains a year ago (30 in July 2015). 16 cities reported monthly price declines, although that is also better than July 2015’s 29 cities.</p>
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<p><span>The secondary market has not seen as strong an improvement over the past year, a net 51 cities reporting monthly gains in July versus 41 a year ago and a peak of 54 four months ago (in March). 12 cities are currently experiencing price declines, compared to 17 a year ago. </span></p>
<p><span>Splitting the 70 cities into the three development tiers, tier-1 continues to experience a robust pace of price growth, an average of 27.0 percent/yr for new housing and 29.3 percent/yr for the secondary market. </span><span>Versus April’s </span><span>peaks of 31.5%yr and 36.1%yr, that is still best characterised as a modest deceleration. </span></p>
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<p><span>Within this tier, a normalisation is continuing: </span></p>
<p><span>Shenzhen new property price growth has slowed from 62.5 percent/yr in April to (a still very strong) 40.9 percent/yr; meanwhile, Shanghai price growth has plateaued circa 28 percent/yr, as has Beijing and Guangzhou (albeit nearer 20 percent/yr). </span></p>
<p><span>Similar trends are apparent in the established or secondary markets: Shenzhen slowing from 60.6 percent/yr in March to 33.9 percent/yr currently, and Beijing from 37.3 percent/yr in April to 32.1 percent/yr; Shanghai and Guangzhou price growth has been broadly unchanged in recent months, respectively 30 percent/yr and 20 percent/yr.</span></p>
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<p><span>Moving on to the less developed and wealthy tier-2 cities, new and established housing saw annual price growth of 7.8 percent/yr and 6.7 percent/yr in July. Both markets still remain in an uptrend, albeit a very modest one. </span></p>
<p><span>This is even more the case in tier-3, where new and secondary house prices have risen just 3.8 percent/yr and 2.4 percent/yr over the past year. </span></p>
<p><span>Clearly activity is concentrated in the most established and wealthy markets, where there is likely to be a greater speculative element. The problem is that these are not the cities with the greatest growth potential. </span></p>
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<p><span>Further on aggregate activity, we note finally that momentum in housing sales and starts has already turned down. </span></p>
<p><span>The outlook for real estate investment in late-2016 and into 2017 is fragile and unlikely to provide a significant contribution to aggregate growth.</span></p>
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<div class="section">Elliot Clarke is senior economist, Westpac and can be contacted <a href="https://www.westpac.com.au" target="_blank">here</a>.</div>
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