According to the AFR, the devaluation is only a small part in the bigger Chinese investment picture. Yes, the Yuan has devalued but the cost per square metre is still better in Sydney and Melbourne than it is in Shanghai and Beijing. Further, the Australian dollar has also declined, meaning that most Chinese investors would perceive the Australian property as being less expensive in value, making Sydney and Melbourne safe options for wealth preservation.

No doubt there has been a boom in investment from China, and the limitations on sales by the Foreign Investment Review Board means there is still an excess of buyers wanting to invest in Australia, which will negate any effects from the Yuan devaluation.

However, others take a more pessimistic view. SBS news reports that some academics believe that the depreciation will probably slow down a lot of Chinese investment in Australian real estate, as a weaker Yuan makes property more expensive reducing the purchasing power of Chinese buyers.

Another way of looking at the situation is that the fall in China’s currency could be a good thing for Australia, because it will result in many Chinese wanting to move money out of China into more stable long term property investment options. This would mean greater commercial investment from China here in Australia. Furthermore, the weaker Aussie dollar would be an invitation for Chinese buyers to consider Australia rather than the U.S. or Europe to park their capital.