Australian gov't property ruling could deter Chinese investors: expert

The Australian government's decision to force a Chinese investor to sell its Sydney Harbor mansion could spark anti-Australian sentiment among high-level Chinese property investors, according to a top real estate expert specializing in foreign investors.

Under Australian laws, foreigners are only allowed to buy new houses or apartments and not second-hand properties, such as the Sydney Harbor mansion.

Co-chief executive of property portal Juwai.com, Simon Henry, who advises Chinese investors on Australian property, said the decision would send mixed signals to Chinese property investors.

"Chinese social media thinks this move is a little punitive; that this property clearly won't impact first-home buyers, so what 's the issue," he told The Australian on Wednesday.

"It's not going to stop investment, but it's certainly going to make people question whether foreign investment is welcome."

Real estate agent Steven Zoellner of Laing and Simmons Double Bay told the Australian Broadcasting Corporation (ABC) that the surge in interest from Chinese investors had come over the past two years.

Australian treasurer Joe Hockey told parliament that foreign investment was "welcomed" and "hugely important" to Australia, but investors had to follow the rules -- they could only buy new properties and not second-hand houses or apartments.

"But it is vitally important that every Australian knows that the rules relating to foreign investment are going to be enforced, " he said. Endi