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An influx of foreign money is hitting Australian shores as brokers secure finance for commercial borrowers, says CT Johnson, a China expert who is seeing a significant variance in credit availability throughout the APAC region.
The primary driver, according to the Cross Border Management director, are regulatory controls on the domestic lending environment.
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“That is clearly causing a liquidity problem, which makes the cost/benefit analysis going overseas a little bit different than it was before. However, the appetites vary between regions.”
The Singaporeans, for example, have been very active in funding Australian developments, but Mr Johnson said that they are also “astonishingly conservative”.
“Sometimes they are even more conservative than Australian-based funds,” he said. “The Chinese and Malaysians have been the most active.”
High-net-worth individuals and family offices based in Malaysia have been supplying funds, but the dollar amounts are often not large enough to “move the needle” on domestic projects, according to Mr Johnson.
When it comes to China, those groups that are already offshore looking to recycle funds are the most active.
“I know a number of brokers who have connected with those groups. There have been a few Hong Kong-based groups that represent funders on the mainland,” Mr Johnson said.
“Currency regulations and capital outflow restrictions in mainland China have created problems, however; so it is really a mixed picture and it depends on where you are looking for funds.”
[Related: Big banks still funding resi developments, says broker]
