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More Chinese buyers to come?

Posted by Impression on 10, Nov 2014

New Zealand was a favoured destination for mainland China-based investors due to the large Chinese resident population here and strong trade ties between the two countries.
 

 

China's plans to ease the restrictions its citizens face when investing overseas will result in increased Chinese capital flowing into New Zealand's property market and contribute to rising house prices, says an economist.

The world's second-largest economy still has a relatively closed financial system, with strict capital controls.

The People's Bank of China outlined a plan that will allow Chinese nationals to invest in overseas property and stocks through a Qualified Domestic Retail Investor Scheme. ANZ's chief China economist, Li Gang Liu, told the Business Herald it was likely to be gradually phased in from later this year and ramped up during 2015.
New Zealand was a favoured destination for mainland China-based investors due to the large Chinese resident population here and strong trade ties between the two countries.

Chinese nationals are officially restricted to the equivalent of US$50,000 a year in foreign exchange, although loopholes sometimes used to get around the law include splitting up large sums of cash into tranches and using friends and family to transfer it abroad. They found the prospect of buying freehold property in countries like New Zealand - an opportunity not available in their homeland - very attractive.

There is no official register of residential property sales to foreigners, but a survey last year found they accounted for 8 to 9 per cent of total sales. Australians accounted for 22 per cent of all sales to foreigners, followed by Chinese (20 per cent) and British (13 per cent).
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