McGrath laments drop-off in foreign demand
Outgoing real estate head John McGrath has said Chinese demand for property has nosedived.
McGrath has stepped down as chief executive of McGrath estate agents, taking on a new role as executive director, the Australian Financial Review has reported. Current joint chief executive Cameron Judson will take the reins of the company’s day-to-day operations, though McGrath told the AFR he would be responsible for the strategic direction of the real estate network.
The move comes after a disappointing public float for McGrath last year, with shares still more than 40% lower from their initial public offering of $2.10, the AFR said.
McGrath expressed optimism in the property market, however. Judson echoed his sentiments, telling the Australian that the fundamentals of the real estate industry “remain attractive” in spite of challenging short-term market conditions.
One of these challenging conditions, McGrath suggested, is the drop-off in demand from Chinese buyers. McGrath told the AFR Chinese demand for property had halved compared to a year ago, calling the development “disappointing but not surprising”. Speaking to the Australian, he laid the responsibility for the drop-off largely at the feet of decisions by the Victorian, Queensland and NSW governments to hit foreign buyers with increased stamp duty.
“We should be encouraging overseas investment in our market, but the changes we have seen have definitely had an effect,” he told the Australian.
McGrath predicted that price growth would slow in Sydney and Melbourne, and said Sydney may see little growth for the rest of the year. Other markets, though, could flourish.
"I think there will be more significant growth in prices in the big regional locations like the Central Coast, Wollongong and Newcastle,” he told the AFR.