China property bubble continues to cool. Trouble for Harry?

Measures by China’s central government to cool its once bubbling property market is continuing to yield results with figures from the National Bureau of Statistics (NBS) showing a 17.5 percent drop in the number of home sales in the first quarter this year. According to the bureau, new house prices in 45 out of 70 cities declined in February, while 21 cities reported no change in price. The Beijing Real Estate Association reports prices for new residential houses in Beijing are down 20.7 percent yoy.

China has just reported the slowest economic growth in three years with GDP falling to an annualised growth of 8.1 percent for the first three months of this calendar year.

Late last year, under the headline “Chinese prop up property market,” the Australian Financial Review suggested the Chinese were the only thing keeping Harry Triguboff’s “cement mixers turning”.

This week at the opening of Meriton’s Vantage apartment block in Rhodes NSW, Mr Triguboff said interest rates where too high, demanding the RBA’s governor Glenn Stevens to drop rates, “He has to drop. I can’t believe it’s that high.”

He told the Australian Financial Review, “It got to a stage [last year] where I had 85% of purchasers who were Chinese, and now it’s down to 65%.”

“We’re very happy with Chinese coming here, but we must have our own.”

If we assume there hasn’t been a surge in domestic buyers as interest rates are apparently too high (not the price and leverage required to purchase one), then the figures can only mean one thing. Fewer Chinese are buying Harry’s apartments. Could falling house prices back in mainland China, have the Chinese questioning if property always goes up?

In late 2008, the Rudd Government made administrative changes to Foreign Investment Review Board (FIRB) legislation which could be seen as one measure to encourage foreign buyers to purchase our property and help keep demand up for our ailing property market.

If this is the case, it could be another lifeline gone in the who wants to be a property millionaire game show.

» China Property-Sales Drop Shows Risk of Hard Landing – Bloomberg, 14th April 2012.
» Home prices in most cities stop growing in Feb – China Daily, 18th March 2012.
» Beijing housing prices 21% down in Q1 – China Daily, 9th March 2012.
» Real Estate Investment by Foreign Residents : Top Secret – Who crashed the economy?, 4th January 2012.


  1. 85% Chinese! What about the remaining 15% ? Were they from Vietnam, Saudi Arabia or elsewhere?. How many Australians actually purchased a place to live in themselves, from Harry?.

  2. Triguboff should be talking to Phil Chronican now. He sets interest rates, and they just went up.

  3. I’m foreign (British), in my mid-forties, married to an Aussie and moving to Sydney in 6 weeks. I’m NOT an investor – I just want to rent a home. We can’t find ANYWHERE to live! Everything is either stupidly expensive or a complete shit-hole. Anything that is vaguely affordable looks like social housing or student accommodation. I am moving to Australia for a better quality of life, but so far it looks like I will have to downsize from a four bedroom house to a two bedroom flat. God, I’m depressed.

  4. Rupert, wait till you see how much you spend. Rent is only half of it… wait.. make that pun ‘intended’… it is about half, if not more.

  5. Rupert, welcome to the Australian housing bubble, where the government does everything in their power to prop it up. High prices must be maintained! However, I must give credit where it is due, and so far prices have been allowed to fall a little without any more government stimulus. Massive immigration, government grants and negative gearing put a floor under property prices. Take away any of these and prices would fall, however the bubble has proved to be unsustainable anyway. You might be here in time to sit back and watch the bubble pop. It will be loud!

  6. Seeing as “actions speak louder than words” Harry is obviously far more concerned with “growing his billions” than with those who provide him with their worked-for money.

    Unfortunately for Australia we’re so dependent on house flipping / speculation that once this bubble implodes, so does the National Economy (shades of Ireland, but being Australian, “we did it bigger down under”).

  7. @Don’t Pop Up the Pozni – I share your sentiments entirely, but in the meantime I’m going to blow my entire deposit on renting a flat for a year or two. It’s all mad!

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