Hong Kong’s Mainland-backed Phoenix New Media recently reported that, based on an analysis that Morgan Stanley Chase completed, the commercial real estate markets in New York, Sydney, and London may face serious challenges in the next two years. The primary cause of this warning is that Chinese investors have started withdrawing from overseas real estate markets. The Chinese government is tightening up capital control and commercial loans very quickly. Statistics showed that, since the beginning of 2017, the total of Chinese overseas real estate investment has declined 84 percent. The expectation is that an additional 18 percent drop will continue into year 2018. The same 2017 number that the Chinese Ministry of Commerce released was an 82 percent decline. According to statistics that the Chinese banking industry published, in the first half of this year, China’s total direct investment overseas showed a decline of 45.8 percent, to US$48 billion. In the second quarter, real estate pricing in Manhattan had already dropped 25 percent.
Source: Phoenix New Media, August 14, 2017