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One property group has warned that Chinese investors could fare better than local buyers if the Reserve Bank of Australia tightened lending rules.
Governor Glenn Stevens told the Melbourne Economic Forum last week that the central bank may implement new rules to cool the property market.
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Ausin Group managing director Joseph Zaja said locals would probably be hit harder than foreigners because of the different lending criteria that apply to the two groups.
“Generally, locals can borrow up to 90 per cent of the property purchase price whereas overseas investors can only borrow between 60 to 80 per cent,” Mr Zaja said.
“Price fluctuations and lending changes will have little impact on foreign property investors because they already have significant equity in their property.
“For local purchasers this is a very different story: they are much more susceptible to price fluctuations. This is the market that I would be very concerned about if prices go south.”
Mr Zaja said Chinese buyers – who make up the bulk of Ausin’s clients – have been budgeting for valuations to be about 10 per cent under the asking prices in and around Melbourne's CBD.
Melbourne is experiencing a short-term housing oversupply, particularly in the CBD; Sydney, however, is experiencing an undersupply, according to Mr Zaja.
He said the two markets would be affected differently if the Reserve Bank took a blanket approach to any new regulation.
[Related: Prominent economist sounds alarm over property speculation]
