Even though Chinese investments have dropped over the years, demand for Australian real estate continues to be strong
US investment in Australian real estate increased to $19.5 billion in 2018-19, more than three times over the previous fiscal, followed by a massive surge in Canadian investment from $2.1 billion to $13.3 billion
The Australian real estate landscape has been quickly filled by investors from the US and Canada, according to the Foreign Investment Review Board’s annual report tabled in the Parliament recently. Challenging conditions in the Australian real estate market, along with Beijing’s increasingly tighter restrictions on foreign investments in the wake of a devaluation in Yuan a few years back, have resulted in large-scale exodus of Chinese investors from this country’s property sector. But that hasn’t stopped investors from North America picking up prime real estate down under.
As per the report, investment levels from China halved to $6 billion in the last financial year from $12.6 billion in the previous fiscal—a massive drop that has pushed the East Asian country’s ranking to the fifth spot behind Singapore and Hong Kong on Australia’s source country chart for real estate investment.
“The reduction in proposed investment applications, by value, from China reflects an ongoing downward trend in the value of Chinese investment from its peak in 2015-16,” Foreign Investment Review Board chairman David Irvine said in the annual report.
Apart from local factors like the introduction of foreign investment application fees, the doubling of stamp duty in Victoria and NSW, and tighter lending conditions from the banks, the report has attributed the drop in Chinese investments to “Beijing’s internal domestic policy settings, including increased scrutiny of outbound investment and stricter capital controls”.
But as investment levels from China halved in a year, US investment in Australian real estate increased to $19.5 billion in 2018-19, more than three times over the previous fiscal, followed by a massive surge in Canadian investment from $2.1 billion to $13.3 billion.
This shift in the investment pattern by overseas investors made Australia witness a modest rise in the number of approved purchases in the last financial year to $14.8 billion, up from $12.5 billion, the report has pointed out.
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