Despite more vigilant surveillance of foreign investment in Australian property, foreign buyers account for more than one-in-10 established properties in Victoria and New South Wales.
NAB’s quarterly residential property survey – which spoke to around 300 real estate agents, developers, fund managers and property owners/investors – found that foreign buyers were more active in the established housing market in the second quarter of 2015, with demand rising to 11.4% of all established apartment sales and 9.4% of house sales.
Across the states, more foreign buyers were attracted to established apartment markets in all states, led by VIC (17.5%) and NSW (12.6%). Foreign buyers also had a much bigger presence in the established housing market in VIC, with a 16.1% share of total demand in this market in Q2, followed by NSW (10.2%), WA (5.8%) and QLD (5.3%).
This is despite much stricter restrictions on foreign investment in the established residential property market. The rules currently dictate that foreign non-resident buyers are not allowed to purchase existing dwellings in Australia, unless they are purchasing the property to redevelop it and add to the housing supply.
Earlier this year, the government also introduced fees for overseas buyers to help fund the administration and enforcement of the rules. Under the framework, foreign investors will be charged an application fee – on a sliding scale starting at $5,000 – to invest in Australian real estate.
Foreign buyers were less active in new property markets over the quarter, however. Overall, foreign buyers accounted for 12.8% of total demand (15.6% in Q1), with foreign buyers less active in VIC (18.1%), NSW (13.1%) and WA (10.1%).
