China crisis to cause local property rut

Ok, we all know the Chinese stocks are crashing. But nobody has connected the dots. Property was accepted as collateral for margin loans. Those loans are now being called. So there is about to be a huge amount of Chinese property dumped on to the Chinese real estate market.

Since the NZ and AUS property markets have in recent years been fueled by Chinese buyers, one should expect a sudden cessation of such buyers and therefore a fall in prices. But it gets worse. You may find that these buyers suddenly turn into sellers, dumping quickly in order to pay their margin debt back home.

Now this ignores any other associated negative factors such as decreased demand for local houses thanks to a sharp fall in demand for resources, affecting mining jobs. Expect this to be reflected in the stock prices of the local market, causing a reversal of the wealth effect, putting further pressure on demand for property