Analysing the Impact of China’s Recent Domestic Housing Policies on the Global Real Estate Market: A Case Study of Chinese Investment in Sydney’s Housing Market

Within the wider context of housing financialisation, rising international investment in residential real estate is thought to contribute to price inflation in many nations. For instance, in Australia where housing affordability is a matter of national concern, much attention has focused on the role of international investors – particularly from China – in exacerbating market pressures. Yet research evidence on the scale and drivers of international foreign investment in domestic housing markets is surprisingly slim. Similarly, there has been limited research on the ways in which international housing demand might influence new supply in ‘receiving’ nations, including the role of international development firms who seek to undertake their own investment in residential housing overseas, catering both to home country international investors as well as new domestic markets. This research addresses these themes by examining Chinese investment in the global real estate market, investigating the underlying drivers constraining/compelling Chinese investors in foreign housing arenas, and the potential implications for both China’s domestic and foreign capital-recipient markets. The study uses Sydney, as Australia’s largest and globally connected city, as a particular case study example for examining the factors influencing Chinese investors and development firms to operate within a specific housing market. A mixed methods approach is adopted for this study, incorporating insights from behavioural economics, to understand drivers of foreign real estate investment, and policy analysis to examine the extent to which particular policy settings are critical in understanding the context for Chinese domestic and international investment demand in housing. Quantitative analysis of empirical housing market trends as a further dynamic factor reflecting and influencing global housing demand supports this analysis. The findings of this research provide insights as to the policy relevant drivers of international housing demand both in terms of ‘push’ policies that may influence investors to seek international markets; and ‘pull’ policies enacted by particular nations to entice foreign real estate interest, which contributes to wider understandings of housing globalisation and financialisation