Ewan's Blog

July Director's Desk - Game Changer

Friday 17 Jul 2015

There is some reason for some straight talking on the back of the wobbles experienced in China over the last couple of weeks. It does have the potential to be a game changer, however perhaps not in the way you might think.

Even without comprehensive statistics it’s pretty evident that foreign investment has played a large part in driving much of the recent strength in the local property market. So on the back of the crash in China the question many are now asking is what will happen if a significant proportion of that investment withdraws from the Sydney property market?

But I would challenge - is it correct to jump to the conclusion that the Chinese stock market crash will automatically lead to foreign investment in our local market drying up?

Not necessarily.

Remember we live and operate in an international world. Yes that means there is a danger we could be susceptible to the idea that ‘if China sneezes Sydney will catch a cold’ but I certainly don’t see it as inevitable.

As I have said before, often when the share market stumbles investors are more inclined than ever to look for security and value in the property market. Therefore if the Chinese stock market sneezes it could actually be to Sydney that investors come to keep warm!

At the same time the fundamentals for local buyers remain very strong so the other possible scenario is that any hole in the market left by investors hit by economic events overseas will be rapidly filled by eager domestic buyers.

The fact is the Sydney property market remains solid in all price brackets. Demand is there which is fuelling good results for vendors. Whenever things are going well our inclination is to worry about when it will go the other way. I believe that now is a great time to be in the game and I don’t see that changing anytime soon.