An increasing number of Chinese property investors are turning to Australian non-bank lenders to fund their acquisitions and projects in the wake of foreign investment crackdowns.
Restrictions on funds transferred from mainland China and local banks' tightening of lending criteria for property investors and developers have resulted in many Chinese residential and commercial projects coming under pressure, according to Chifley Securities.
As a result, Chinese investors are increasingly seeking support from Australian non-bank lenders.
“The tightening of Chinese government rules to stem the flow of capital from the country and the tougher lending criteria of the major Australian banks has seen a boost to non-bank’s business volumes,” Chifley Securities’ director Joe Morello said.
“Coupled with the depreciation of the Australian dollar and the historic low interest rates, non-banks are expected to post a bumper year in lending and we now have close to $1 billion worth of funding lines.”
In recent months, Chifley Securities’ recorded a spike in demand from Chinese investors and developers, with close to 27 per cent of its loan book now worth more than $500 million devoted to Chinese borrowers.
The non-bank lender noted that the loans acquired by Chinese borrowers have been directed at financing development residential and commercial projects, as well as the acquisition of properties for future development or currently under construction.
Chifley Securities is funding property-backed projects ranging from $1 million to $50 million.