_The growing wave of Chinese money in Asia-Pacific

The main bulk of Asia-Pacific cross-border capital originated from Hong Kong and mainland China, constituting 80.2% of the total money spent on acquiring overseas residential lands within Asia-Pacific. On the surface, Hong Kong alone is the front-runner with 74.5% of the market share but in fact the most acquisitive companies have roots in the mainland. For instance, three out of the top five most aggressive overseas housing developers listed in Hong Kong are subsidiaries of Chinese state-owned enterprises. Thus, it is no surprise that Chinese money has been in the limelight recently. Notably, as an island-state, Singapore-based developers are trailing behind Hong Kong, snapping up 7.3% of the total cross-border volume as they actively pursue more overseas development opportunities. Other notable players include United States (3.2%), Japan (2.4%), Malaysia (1.7%) and United Arab Emirates (1.1%).

The growth in outbound activity by mainland Chinese developers has been one of the key trends over the past decade, with volumes going from practically zero in 2009 to more than US$2.5 billion in 2016. From 2012 to 2016, their favourite destination was Australia (36.5%) along with other key markets include Hong Kong (23.7%), Malaysia (19.7%) and Singapore (15.4%). Following the flurry of cooling measures introduced in major Chinese cities and the recently enforced capital controls, we expect Chinese developers to put more money into Hong Kong and smaller Tier-3 Chinese cities this year. In the first quarter of 2017 alone, Chinese developers invested over US$5.1 billion in the region, with more than US$4.9 billion or 95% concentrated in Hong Kong.

Get more insights on Asia-Pacific Residential Review May 2017