Decline in dollar hits Chinese investors

Chinese investors have seen 30 per cent wiped off their Australian investments as a result of the weakening dollar, business intelligence provider, Basis Point reports.

Basis Point managing director, David Chin, said the falling value of the Australian dollar against the Chinese Yuan had seen investments by Chinese permanent residents and temporary visa holders over the last two years decline in value by more than $12 billion.

Chin said Chinese investments totalled $40.3 billion in the 2012 and 2013 financial years, with the majority going into the resources sector.

"Since that 2012/13 period, the renminbi to Australian dollar rate has dropped from an average of 6.5 in the two year period to June 2013 to 4.5 currently, a drop of 30 per cent," the company reported.

However, Chin said Chinese investors were not the only ones hit by the declining dollar.

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"To be fair, investors from the US have lost as much money due to the Australian dollar weakness and assuming their foreign exchange risks were not hedged," he said.

"[However], most of the Chinese and US investments are long-term in nature and so would be held as ‘unrealised losses'."

While currency fluctuations have slashed the value of some investments, Chin said that Chinese investors who bought $5.9 billion worth of off-the-plan apartments in the year to June 2013, are looking at gains of more than 40 per cent, as the full settlement was only required on completion in 2015.