We’re not called the Lucky Country for nothing. A stable economy, a strong housing market and a great lifestyle make us the envy of the world.
So it’s no surprise the obsession with Australia has found its way into our real estate market.
In fact, the obsession with our real estate has seen it receive the 2nd highest amount of foreign investment behind mining.
13% of all foreign investment was in property. According to the Treasury, China was the biggest buyer by a long margin, handing over $3.4 billion for real estate in 2022-23.
And it’s growing quickly. International agents are reporting a 400% increase in enquiries, and approvals by the government are up 40% in the last quarter compared to just a year ago.
In other words, it’s just getting started. In fact, a lot of millionaire foreigners are leaving their countries and entering Australia.
So, what are foreign buyers snapping up?
There’s a real mix actually.
The crème de la crème houses overlooking Sydney Harbour and in Melbourne’s Toorak are popular.
Just recently Chinese buyers handed over $30 million for a Vaucluse mansion, and another in the same suburb went for $36.6 million.
In Melbourne’s Toorak a Chinese buyer spent over $42 million for a home there.
[A Chinese buyer snapped up Melbourne’s Carinya Estate in Toorak for over $42,000,000]
Toorak buyer’s agent Alex Bragilevsky has facilitated $135 million worth of sales in the past 6 months.
He says they come to Melbourne on a private jet, he meets them with a nice car, and they go looking at real estate.
Plenty are paying straight up in cash too.
In fact, the United Arab Emirates, home of the playground of the rich and flamboyant has dropped to #2 in the list of destinations for high net worth individuals.
And their money is instead coming here to Australia instead.
Plenty of Chinese buyers have their sights set on high-quality, low-maintenance properties like townhouses, houses, duplexes and large apartments.
Some are for their children who are studying here.
Others are coming here with their families and are prepared to pay well over the asking price for a house in the right secondary school zone.
Normally, of course, this wouldn’t be a major problem.
Usually, any increase in demand is met with an increase in supply. And everything continues on as before.
Except as I’ve discussed in previous articles, our supply is at a chronic low. And every house which is snapped up by a foreign buyer leaves one less house for a local to buy.
Even though the numbers are still small in the context of the overall market, every little bit helps.
And any halt seems a long way off.
There might be mounting pressure for loopholes such as Kevin Rudd’s decision to allow temporary migrants to purchase Australian homes to be closed.
But at the same time, there are plenty of vested interests putting pressure on to keep the foreign money flowing.
So for now, foreign investment remains a part of the Australian investing landscape.
And as supply falls and prices surge, it’s just a little bit more fuel to add to the fire.
Yet, let's view it as a sneak peek into the future property boom—why not jump into the property markets ahead of the game?