The Chinese are the biggest foreign buyers of Australian real estate. In April 2016 Bloomberg reported that Chinese buyers had received approvals to double their investment in Australia’s residential properties and commercial spaces in 2015 for a second year.
According to Australia’s Foreign Investment Review Board’s (FIRB) annual report, Chinese approvals to spend on Australian residential and commercial real estate increased to A$24.3bn in the 12 months through June 2015, up from only A$12.4bn in June 2014. In the 2013-14 financial year, China surpassed the US as Australia’s biggest foreign investor.
Bloomberg says purchases by foreigners – many who have a connection to China – helped drive an almost 55% increase in home prices across Australia’s capital cities in the past seven years. This was while mortgage rates dropped to five-decade lows.
According to the FIRB, total foreign investment into Australia climbed to A$194.6bn in 2014-15, with an “overwhelming majority” of such deals relating to real estate.
Australian law largely limits overseas buyers to purchasing new homes. These foreigners need government approval from the FIRB.
Temporary residents can buy new or existing properties with the board’s approval, but must sell when they leave the country. China’s property inflows to Australia are unsurprising, comments John Platter, global PR and communications director for Juwai Chinese international property portal on domain.com.au. “We expect Chinese investment overseas to more than double or triple by 2020, and that is not just in Australia – we mean globally,” he says.