Investorist's survey of its Chinese agent companies shows that demand for foreign property is likely to remain strong in 2016, and will even surpass the level of investment in 2015.

Share-market volatility, tighter government controls on capital outflows, and a weaker Yuan haven't dented China's insatiable demand for Australian property.

Investorist surveyed 150 of its member companies to gauge their outlook on Chinese international property transaction for the year ahead. The results were collated in its report "China 2016 International Property Outlook."

Of all the companies surveyed, almost all said they predict Chinese demand for overseas properties in 2016 will continue to grow.

Vida Lu, Sales Manager Alliance, says “More and more Chinese investors are beginning to understand the benefits of investing overseas, so the demand will continue to grow, especially with the background of the Chinese domestic real estate market now at its peak,” he said.

The reasons cited for buying international property were: increasing demand for safe investments (46%), belief the Yuan will devalue further (34%), migration (17%), and weakening of the domestic economy (3%).

Only 7 of the 150 surveyed companies said foreign countries' policy changes, such as Australia's tightened FIRB rules, will affect their sales of overseas properties this year. The greater risk, they said was tighter Chinese government control of foreign currency outflows.

"I don't think the new policies in certain overseas countries will hold back the Chinese investors, because their strong motivations for going abroad have not changed," said Lu.

A total of 41.8% of survey respondents said investment yield is the main reason the Chinese buy foreign property, but 26.7% said access to education was the main driver, and 19.3% said migration. Another 12.2% said lifestyle was the major motivator for buying foreign property.

Recent weakness in the Chinese Yuan has direction property investment attention away from the US and the UK to countries where the currency has also fallen, such as Australia and New Zealand. Australia remained the most favoured market.

Jon Ellis, Founder and CEO Investorist, said, “Over the last 12 months activity on Investorist clearly shows Chinese agency interest is directed to countries exhibiting stable governments, robust economies, top class educational institutions and favourable residency programs.”

With apartment living the norm in most of China, 58% of respondents said apartments were the most popular investment. However, investors looking to buy property to live in, prefer houses.

"The Chinese investor's pocket is deep and getting deeper," claims the report. Most Chinese investors were looking to spend between $500,000 and $700,000 the survey showed, an increase on last year, when most wanted to spend below $500,000.

Jon Ellis, Founder and CEO Investorist, said that though the general outlook is good, there are still downside risks.

He said, “The biggest risk to Chinese investors' ability to invest in foreign property is if the Chinese Government clamps down on capital outflows from the country.”

In Australia, he said, there are also risks.

“Our banks have started restricting foreign lending, in particular Westpac’s move last week,” said Ellis. “Whilst foreign banks will lend, their rates and terms are significantly less favourable so this is the biggest risk.”

"The value of the AUD vs. CNY has been rebounding lately. Depending on where it goes, this could start changing our favourable international pricing,” he said.

“Misguided government taxing policies such as the recent Victorian state government decision, sends negative messages to foreign buyers that they are unwelcome and threatens their investment enthusiasm.”

But Ellis pointed out that other countries are facing similar problems.

“Australia is fortunate that banking controls are also quite tight in the US and the UK. Providing banking doesn't get any more problematic domestically and nothing dramatic happens with the Australian dollar, we do not see any foreseeable easing in demand for Australian property this year,” he said.

Ellis had recently returned from hosting a series of events in China, and I asked him was the mood there was like.

“Enthusiastic but considered,” he replied. “Our members have never seen higher demand from both new customers wanting to make their first foreign investment, and existing customers wanting to buy a second or third property in markets that have been successful for them.  

“However the industry has also been growing up and Chinese agents have learned even more about what makes a sound investment decision for their clients.

“They also have more choice than ever before, both in terms of the product and markets they have access to. So agents are becoming more and more discerning in the property recommendations they make.”