Chinese investment in global real estate hit a seven-year low in the first half of 2019, as domestic policies and the trade war with the U.S. stymied outbound capital.

Mainland Chinese investors spent $3.8B on real estate outside the country in the first six months of the year, the lowest figure since 2012, and down 66% on the first half of 2018, according to data from Cushman & Wakefield and Real Capital Analytics.

On top of this, the capital that is leaving China isn’t going very far: 61% of outbound capital was invested in Hong Kong, and 20% travelled a bit farther and was invested in Australia.

The U.S and UK, which in 2015 accounted for a majority of Chinese outbound investment, registered less than 15% in 2019. That is because of uncertainty created by the U.S. trade war with China and the impact of Brexit, Cushman said.

The biggest factor limiting outbound Chinese investment is regulation which means overseas real estate transactions have to be approved by the central government. The policy is an effort to stop capital flight from China and stop companies making highly leveraged overseas acquisitions.

A lot of the big Chinese investors in the U.S. and UK for the past few years have become forced sellers. Anbang is reportedly in talks to sell Strategic Hotels & Resorts to Korean investor Mirae Asset Financial for about $5.5B. And in London HNA is in the process of selling two office buildings in Canary Wharf.

Cushman said that if or when the Chinese government changes regulation on outbound investment, there will be strong interest again in global deals.

“In a rate-cut environment, the demands for core assets will be on the rise and both mainland Chinese and Hong Kong investors will look for allocations globally,” Cushman Head of China Outbound Investment and Advisory Services Jason Zhang said.