Chinese buyers looking to invest in the global property market have been given a major boost following the abolishment of rules originally implemented by the Chinese government to strengthen the renminbi (RMB).

First set in place in 2015 with the aim of curbing capital outflows to stabilise the Chinese yuan, on September 8th the People’s Bank of China (PBoC) sent out a notice to banks scrapping the rule that allowed them to reserve a 20 per cent deposit on sales of foreign exchange.

As China ramps up their plans to further liberalise capital controls, Chinese investors – including those looking to invest in the Australian real estate market – will be bolstered by a more flexible national exchange rate.

And with speculation rife that the Chinese government may ease capital controls even further in the not too distant future, there’s reason to believe Chinese investors may be about to make a powerful return to the property market following a 9.7 per cent drop in inquiries in Australian residential property compared to the same period in 2016.

After a record $219.3 billion was spent on outbound deals in 2016, strict rules were implemented at the beginning of 2017 to ensure extra scrutiny was placed on overseas deals, however these weren’t enough to stem the flow of Chinese nationals investing overseas.

“For the real estate markets, [the changes show] that capital controls could be further unwound in the near future. That would potentially lead to increased Chinese investment in overseas property,” Jane Lu, head of Australia for juwai.com, a Chinese international property website, told Your Investment Property Magazine.

“China’s government is declaring victory in its battle over capital flight. Their goal was really to show they had the ability to control the value of their own currency, and they have certainly done that. The yuan has now more than regained everything it lost last year,” Lu added.

This significant change in attitude comes as welcome news for investors, with the Economist Intelligence Unit predicting the Chinese government will continue to apply economic reforms that will lay the groundwork for China’s growth for years to come.

While the strict rules have lessened interest in the Australian property market, Chinese buyers have remained active in other overseas markets such as Thailand that’s soared from sixth to third spot on the top countries list for Chinese property buyers.

The new, relaxed outlook of the Chinese government as they push toward financial reform is likely to majorly boost the number of international Chinese property investments, where Australia remains number two on Chinese buyers’ wish lists.