Australian property - still in overseas sights

New data from REA Group’s PropTrack shows that overseas interest in buying and renting Australian property remains strong, despite high prices and rents and a decline in the number of visas available for international students.

PropTrack says overseas searches to buy on Australia’s largest property website, realestate.com.au, have remained strong, while rental interest has pulled back slightly from April 2023.

However, PropTrack says search volumes remain elevated, compared to the five-year average to April 2024.

Foreigners looking to buy

PropTrack says searches from overseas property seekers looking to buy Australian property rose 0.8% over the year to April 2024.

Inquiries were also 20% higher in April than the five-year average.

The growth over the last year has primarily been driven by people based in the United Kingdom, where searches to buy grew by 6.9%.

Conversely, purchasing interest from China (-2.6%), the US (-0.7%), New Zealand (-4.1%), Hong Kong (-10.5%), Singapore (-1.1%) and India (-6.3%) eased over the past 12 months.

Queensland is the top destination where potential overseas buyers are looking to purchase property, with the Gold Coast high on the list.

“The scenic beaches and perpetually sunny climate of the Gold Coast continue to captivate overseas property seekers, ranking as the most searched-for location for buyers and the third for renters,” says Karen Dellow, Senior Data Analyst with PropTrack.

Victoria is the second most sought-after state for buyers, with a concentration on searches for luxury inner city apartments in the Melbourne CBD and homes in Melbourne’s exclusive beachside suburb of Brighton.

And the type of properties overseas buyers are interested in?

Given that it’s extremely hard for temporary residents or overseas buyers to purchase an existing property, PropTrack found foreign buyers were looking primarily at luxury off-the-plan inner city developments with excellent amenities.

Karen Dellow says the most viewed new development in the past year is West Side Place in Melbourne, which boasts “an array of amenities such as sky gardens, pools, gyms, dining rooms, and even a cinema and karaoke lounges.”

Entry-level apartments in the complex start at $525,000.

Foreigners looking to rent

PropTrack says overseas rental searches have pulled back slightly from the elevated levels seen last year and were 2.3% lower in April than the same time last year.

However, Proptrack’s Karen Dellow says it is “worth noting rental search volumes still remain elevated compared to the preceding four years.”

She points to “recent governmental mandates concerning students and educational institutions” leading to a decline this year in visas granted to people intending to study in Australia, noting that in March 2024, there were 44,580 international student arrivals.

That’s 9,060 fewer student arrivals compared to March 2023.

“Given the correlation between issued student and work visas and the volume of rental searches on realestate.com.au, both are anticipated to decline proportionally due to these policy changes,” she says.

Perhaps unsurprisingly, PropTrack finds prospective overseas renters concentrating their searches in New South Wales and Victoria.

Ms Dellow says this is “likely influenced by Melbourne and Sydney serving as primary arrival points for international flights, as well as the volume of businesses and universities located in these cities.

Central Sydney and Melbourne are the top search destinations for renters.

Once you get beyond CBD searches, Richmond in inner Melbourne, emerges as the top suburb, as Karen Dellow says it’s a place “attracting property seekers with its abundance of tech companies, vibrant culture, and proximity to the city centre.”

Looking ahead, PropTrack says the government’s stated aim to restore migration to a "sustainable level," particularly through stricter requirements for foreign students, has the potential to curtail some overseas interest in Australian property.

“If Australia adopts more stringent immigration policies, overseas buyers and renters may redirect their attention to more welcoming nations,” Karen Dellow says.

“The forthcoming months will provide further clarity on these trends.”