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Australia’s property market fundamentals and continued attractiveness as a study and migration destination are expected to underpin continued Asian interest in local property in 2025.
Sydney-based mortgage broker, Sheng Ye (pictured), of Home Loan Experts, said enquiries and activity from Asian clients had increased over the last 12 to 24 months after the border reopened following the pandemic.
“I saw an increasing trend in [Asian buyer interest] in 2024,” Ye told Australian Broker. “There are more inquiries on the Australian real-estate market from Asian clients.”
This is expected to continue through into 2025 due to perceived strong market fundamentals.
“They still view the Australian market as an attractive one because the long-term return from Australian real estate is stable and attractive. They will still show interest,” Ye said.
The Q1 2024 Asia-Pacific Cross-Border Trends Report from international real estate technology group Juwai IQI named Australia as the top choice for cross-border Asian buyers in the region.
According to Australia’s Foreign Investment Review Board, there were 1,580 residential real estate investment proposals approved in the final quarter of 2023, with a total value of $1.9 billion.
China was the largest source of approved residential real estate investment proposals by number and value ($0.8 billion), followed by Hong Kong, India, Vietnam and Taiwan, each worth $0.1 billion.
The continued Asia-sourced interest in investing in or buying Australian residential property comes despite a number of detractors that could be expected to dampen demand from Asian markets.
For instance, foreign buyers who purchase residential property in Australia need to pay a 7% or 8% surcharge purchaser duty on top of any transfer duty, depending on the state or territory.
This surcharge is due to rise to 9% in NSW from January 1, 2025, making it the highest in Australia.
Foreign buyers also need to fork out for the Foreign Investment Review Board process, with application fees for established dwellings having tripled this year on April 9.
Application fees for acquisitions of properties worth between $1 million and $2 million are now $88,500 for established dwellings and $29,500 for new dwellings until June 30, 2025.
Foreign buyers also face a land tax surcharge in some cases, depending on the location. Another issue is the Australian government’s recent 250,000 cap on international student visas for 2025.
Ye said the costs made it more difficult for some Asian buyers to afford property in Australia. “It’s not easy for the student or their parents to afford to purchase a property in Australia,” he said.
However, he predicts the student visa cap will not have a strong effect on property demand.
“There will be some impact but it’s not going to be huge because most international students are renting,” he said. “I think it will increase the rental supply because there will be fewer international students.”
Ye said there would continue to be interest from affluent Asian parents wanting to send their children to study in Australia, with a desire to purchase a property for them.
Other children who are graduating from an Australian university and have a graduate working visa are also likely to see help from affluent parents helping them purchase local property.
Ye said there were also other buyer types from China and the region. “Another type is retired people or very asset-rich people who are looking to invest in overseas real estate markets,” he said.
Ultimately, the fundamentals of the market are what will continue to attract them, he said: “They view the Australian market as an attractive destination because the return is stable.”
