Foreigners buyers doubled their spending on established residential housing during 2012-13 according to the Foreign Investment Review Board, while pulling the plug on mining where investment slipped 12.6 per cent.
The Australian reports:
New data from the Foreign Investment Review Board reveals that foreign purchases of established homes rose eightfold during the financial downturn.
Offshore buyers bought a record 5091 established homes worth $5.4 billion last financial year, compared with just 647 properties worth $810 million in 2009-10.
A further 4499 new apartments and homes worth $2.9bn were sold to foreigners off the plan last financial year – more than double the investment recorded three years earlier.
Nearly half the established home sales were in Melbourne and Sydney, where Asian buyers have been targeting properties close to the CBD and on Sydney’s north shore.
Chinese buyers poured $5.9bn into property investment last financial year, topping the list of foreign buyers.
Foreign investment in vacant land doubled last year to $1.4bn, for development and “land banking”.
The FIRB statistics give the first official confirmation of a surge in foreign investment that breathed life into Australia’s stagnant housing market last year. They also expose a slump in foreign spending on commercial property, and a downturn in applications from Australian developers to build new apartment blocks targeted to offshore buyers.
Overall, investment in real estate fell 12 per cent last financial year, to $34.8bn for commercial property and $17.2 for residential real estate.
Only 50 new property projects, worth $5.7bn, were given FIRB approval to be sold directly to foreign buyers off the plan – half the value approved the previous year.
National Australia Bank’s senior property economist, Robert De Iure, said foreigners purchased 11 per cent of new properties and 6.5 per cent of established homes last year. Investment had doubled in the past two years.
While foreign buyers can buy off the plan without any restrictions they can only purchase established housing if they are temporary residents, use it to house Australian-based staff or if they plan to demolish a home for redevelopment.[sam id=41 codes=’true’]
Recently the team at Metropole Property Strategists has helped a few foreign residents by sites for development purposes and I was suprised that approval was granted within 2 business days.
We’ve found some clients are just looking for a safe haven for their money in Australia while others have children studying here and yet others are planning to migrate to Australia.
According to National Australia Bank’s senior property economist, Robert De Iure, said foreigners purchased 11 per cent of new properties and 6.5 per cent of established homes last year. Investment had doubled in the past two years.
There is little doubt continuing foreign investment will be one of the driving forces behind this year’s property markets in our 4 big capital cities.
Read more in The Australian
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