That's been a common theme among people talking about the rising house prices in Australia as well. That Chinese people just buy property to park their money overseas.
But when someone looked at the numbers the number of houses that were bought by Chinese people were in the low single digit percentages.
While this could create some upward pressure on prices it cannot be the only factor. For instance in Australia most of the blame lies of negative gearing (where any money paid in interest on a property can be claimed against all income).
A single digit percentage of actors in the market with the objective of not losing 100% of their capital by turning it into a hard asset in another country is sufficient to move the market.
In Australia it is the combination of negative gearing AND the 50% capital gains tax concession on investment properties. Average rental losses per negative gearer were reasonably constant and small up until 2001 when the 'sound economic manager' Costello introduced the CGT discount, intially for a limited time only to make up for the introduction of the GST. From 2001 onwards, claimed net rental losses have blown out significantly, such that the annual forgone tax is greater than what the federal government spends on universities. This is because the gains permitted with such generous CGT concessions more than make up for year-on-year rental losses. This strategy only makes sense when house prices are rising, which has been the case for ~20 years in Australia. Given that Australians are at, or close to the limit of their ability to take on more credit, real standards of living (real net disposable income per capita) have been falling for the last five years, it seems that the bubble may not be sustainable. Unless you internationalise the housing market and make it a place for turning cash into hard assests, like London.
The data has been notoriously unavailable - when did someone figure out the numbers?
But yeah as siblings said, even a small minority can move the market like that. Just hearing of these huge (successful) prices makes people list higher, etc.
Yeah, funnily enough that's where I used to live, although in an old block of apartments, and I believe I know which place you are talking about. Granted the single family houses around those streets are not exactly 'low density' as they are packed in quite a bit.
But when someone looked at the numbers the number of houses that were bought by Chinese people were in the low single digit percentages.
While this could create some upward pressure on prices it cannot be the only factor. For instance in Australia most of the blame lies of negative gearing (where any money paid in interest on a property can be claimed against all income).