It’s a topic that’s been kicking about for what seems to be months on end – but there’s good reason for it. Foreign buyers, both investors and home occupiers, are here in Australia – and have been for some time.
But recently, global financial services company Credit Suisse predicted that foreign investment in real estate will rise – significantly. The firm estimates Asian investors will spend up to $44 billion in the Australian property market over the next seven years.
However, because of this large presence in the market, some have wondered how badly it will affect house prices. It’s no secret that property prices have risen in certain parts of the country. Take Sydney for example. This state capital has been a hot topic for over a year due to the 16.7 per cent year-on-year house price rise to April, according to RP Data figures.
While this will give current home owners something to smile about, it doesn’t paint a bright outlook for new buyers.
An article from the Australian Associated Press released 30 May reported that Foreign Investment Review Board (FIRB) chairman Brian Wilson had said the presence of foreign buyers isn’t what’s causing sharply rising house prices. In fact, Mr Wilson told the House of Representatives economics committee that it’s likely a lack of housing stock was the culprit for this.
What are they buying?
Recent information out from National Australia Bank (NAB) identifies it’s brand new residential real estate that foreign buyers are snapping up in Australia. The NAB Quarterly Residential Property Survey for Q1 found this activity was most evident in Queensland. Here, a large 24.4 per cent of all new developments were bought by overseas purchasers. Next up was New South Wales, which was just over the ten per cent mark.
But what’s most interesting is that foreign buyer activity reached an all time high for established properties. This figure hit 9.5 per cent of total demand across the whole of Australia. However, New South Wales was the strongest contender in this area. Foreign buyers accounted for 12.7 per cent of established property purchases.
It’s clear that foreign buyers have a taste for brand new property, but there’s also the question of where. With golden sands, bright blue waters and a busy nightlife, the Gold Coast is one area that’s proved popular for foreigners.
Andrew Bell, CEO of Ray White Surfers Paradise, recently told Property Observer in a 29 May article that the central and northern ends of the Gold Coast see much activity from offshore investors.
Mr Bell said Southport is one hotspot, due to the university campus rail service and potential for a “Chinatown precinct”.
Whether it’s an investment, a change of lifestyle or simply an opportunity for their kids, there’s no doubt that Australian property proves popular for foreign buyers.