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Chinese investment in NZ housing tipped to rise
2014-10-21
Brief: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 effect those flows would have on property markets in cities like Auckland, Sydney and London were likely to become a "very hot topic".
NZ house market will see more money once rules eased: economist

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-biggest economy still has a relatively closed financial system, with strict capital controls meaning the sprawling nation - which accounted for 10 per cent of global gross domestic product in 2011 - has a less than 3 per cent share of global holdings of assets and liabilities, according to a Bank of England report.

The People's Bank of China, which wants to promote international use of the yuan currency, last week outlined a plan that will allow Chinese nationals to invest in overseas property and stocks through a Qualified Domestic Retail Investor Scheme.

No timing was provided for the scheme's launch, nor any indication given of its size, Bloomberg reported.

But 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.

Hong Kong-based Li Gang said the Chinese Government had been pushing its state-owned enterprises to go out into the world through investments and wanted to encourage its citizens to do the same.

"The overall trend has been that China would like to encourage more capital outflow," he said.

Li Gang said 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.

Investment flows into this country, particularly into property, would increase as capital controls were eased, he said.

Li Gang said the effect those flows would have on property markets in cities like Auckland, Sydney and London were likely to become a "very hot topic".

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