The recent trade tensions between the Chinese and Australian Governments, along with the impact of travel restrictions due to Covid-19, might have got people assuming that activity by overseas buyers in the property market would have dropped to almost zero. However, indications from a few different sources indicates that this is not the case.
The purchase of real estate by overseas buyers has been dropping for several years now. This reduction has been driven by moves by our Federal and State Governments to tax international buyers more heavily, and by lenders who are reluctant to fund purchases by overseas buyers.
Despite these moves, the most recent annual report of the Foreign Investment Review Board states that…
“In 2018-19, a total of 7,513 residential real estate applications were approved for proposed investment worth $14.8 billion. This is a 2,523 decline in the number of approvals from 2017-18 and continues a trend seen since 2015-16. Despite this, 2018-19 saw an increase in the value of proposed investment in residential real estate by $2.3 billion, representing an 18 per cent increase on the previous year.”
So, whilst the overall number of applications is down, the value of residential property purchased by overseas buyers actually increased last year. Interestingly, whilst the value of property purchased by Chinese buyers was down, the value of purchases by buyers from areas like Singapore and Japan was up markedly.
There are also indications that Australia’s success in dealing with Covid-19 when compared to other countries may also have increased our nation’s appeal for international buyers. For example, one of the leading real estate portals which is used by Chinese buyers has reported that there were twice as many enquiries on Australian real estate in April as in any other month so far in 2020.
Anecdotally, we have also heard reports of real estate agents successfully selling top-end properties where the only ‘viewing’ that the overseas buyers had been able to achieve was via Facetime on their computer screen.
With so many different factors impacting on the property market right now, from overseas buyers and off-market sales to the attendance restrictions on Open Houses and Auctions, the importance of having an experienced, independent Advocate on your side to help you buy or sell has never been greater.
The team at Ian Reid are ready and able to assist you in all your property dealings, so why not give us a call on 9430 0000 today to discuss your options? You’ll also find plenty of helpful suggestions for property sellers in our free booklet, “Fatal Real Estate Traps Exposed”.