That whoosh you just heard? It's Chinese money pulling back from property in London to Sydney to New York.
Capital centres globally should brace for tumbling real-estate prices as Beijing manages to do what Brexit and higher interest rates haven't.
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Reflecting tighter regulations, China overseas direct property investment could drop 84 per cent to $US1.7 billion ($2.15 billion) this year and about another 15 per cent to $US1.4 billion in 2018, according to Morgan Stanley.
Mainland money began piling into offshore commercial property in 2013. Land prices were expensive at home, and investors wanted to find a hedge against a weakening yuan.
![China is responsible for between 12 and 25 per cent of all office transactions by value in Australia over the past two ...](http://web.archive.org./web/20170808195910im_/https://www.fairfaxstatic.com.au/content/dam/images/g/u/e/t/6/s/image.related.articleLeadwide.620x349.gxrfbc.png/1502164189205.jpg)
Another draw was the prospect of higher returns in cities such as Sydney where yield spreads - the difference between rental yields and what government bonds pay - are higher. A slumping British pound post June 2016's Brexit vote helped, too.
While some marquee transactions are still being inked - think the purchase earlier this year of London's "Cheesegrater" tower by Chongqing-based, Hong Kong-listed CC Land Holdings - their numbers are dwindling.
A strengthening yuan, along with China's One Belt One Road initiative that needs funding, will see many property deals dry up.
Over the past few months, Beijing has made it tougher to get money out, clamped down on more fanciful transactions such as the buying of football clubs and luxury hotels, and is now going after some of the country's most prolific acquirers.
Dalian Wanda Group, Anbang Insurance Group, HNA Group and Fosun International have all included real estate in their global buying binges.
Against that backdrop, and with increasing foreign-government scrutiny thrown into the mix, it's hard to see how Chinese offshore real estate acquisitions can continue at such a pace. Domestic developers are already finding it harder to tap international debt markets, and have been resorting to short-term securities instead.
This matters because Chinese capital accounted for one-quarter of commercial property transactions in central London last year, up from 1 per cent a decade ago.
China is now the second-largest foreign investor in the US after Canada, and is responsible for between 12 and 25 per cent of all office transactions by value in Australia over the past two to three years.
It's hard to see how Chinese offshore real estate acquisitions can continue at such a pace.
In Hong Kong, Chinese firms have bought about 80 per cent of the residential land sold so far in 2017, and have spent around $US6.5 billion on office space from 2012 through 2016.
One sliver of good news - some Chinese companies have capital already stashed offshore with which they can keep buying, plus there are other interested Asian parties around.
London's "Walkie Talkie" tower was sold last month to Hong Kong's LKK Health Products Group. And Sunac China Holdings, now the most indebted developer after buying assets from Dalian Wanda Group, last week issued $US1 billion of US dollar bonds.
Whether that's enough to offset the amount of money going the other way, however, is questionable. Investors would be wise to stand well back.
Nisha Gopalan is a Bloomberg Gadfly columnist covering deals and banking.