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Chinese property investors are choosing Bangkok over Sydney and London as they hunt the global capitals for bargain real estate.
"Chinese buyers of property abroad tend to be very price and currency aware so their focus on specific markets will fade or pick up depending on those factors," UBS head of global real estate Kim Wright said.
At present, she said, demand for property in Australia had cooled among Chinese buyers. That, she said, was similar to a loss of interest in London property in late 2015 when buyers felt the market had peaked, while tax changes and tighter capital controls further put them off.
Ms Wright told the UBS Greater China conference in Shanghai that their research suggested tighter capital controls were a factor but by no means a driver for reduced demand.
About 55 per cent of Chinese property investors surveyed by UBS said tighter controls impacted them, but half those said the controls had encouraged them to bring forward purchases while the other half said it would slow their buying.
The research also found that two thirds of property purchases were cash settled, reducing Ms Wright's concerns about settlement risk while most borrowers that took out a mortgage did so with a Chinese bank, suggesting Australian bank lending restrictions were less impactful.
Ms Wright said that Chinese property investors were now looking to Bangkok, Thailand, as a new market.
"I am not sure if that's a function of the One Belt One Road initiative and people are seeing the infrastructure spend and the co-operation, but also the price point is pretty attractive."
While Chinese interest in Australian property has had an impact, the state of China's property market is arguably more important for Australia's economy given it influences demand for commodity exports.
The Chinese government's "shanty town monetisation" program has proved successful in significantly reducing the overhang of properties, or so-called ghost towns. The government effectively funded the relocation of displaced individuals to vacant properties rather than constructing government housing, clearing the housing stock.
The inventory reduction, most evident in second and third-tier cities, helped to reboot the property market to the point where authorities intervened to tighten conditions.
Even if there is more comfort that Chinese authorities can manage a property slow-down, the sector is critically important to the overall economy, accounting for a quarter of "added value" in the economy while 50 per cent of bank credit is tied to the health of the sector
A constant theme at the Shanghai conference was the step up in efforts by Chinese authorities to reduce private sector debt levels and put the economy on a sounder footing without severely impacting growth, or precipitating a financial crisis.
"A Minksy moment will not come in China. The debt problem is not going to result in a sudden collapse," said UBS head of Asian economic research Wang Tao.
"We have high levels of debt but it's not foreign debt. The Chinese banks have a lot of deposits and the governments will strongly convince them to support the real economy [if they have to]," she said.
Dr Wang said data that showed that China's foreign exchange reserves had actually increased was a "pleasant surprise" particularly in the context of fears last year that sustained outflows would deplete reserves and weigh on the currency.
She is forecasting slower economic growth of 6.4 per cent in 2018 and 6.3 per cent in 2019 compared with the 6.8 per cent achieved in 2017.