Foreign buyers snapping up Aussie real estate

foreign investor direct chart

Four years ago, the federal government relaxed some of the rules restricting foreign citizens from buying Australian real estate. Now people who have been residents for just 12 months may qualify to buy established property, a change that has opened the door to a flood of interest from overseas purchasers.

Who’s buying?

Most prominent are buyers from Hong Kong, China and Singapore, who are favouring inner city apartments and family homes on Sydney’s North Shore and in Melbourne’s eastern suburbs.

But they’re not alone; Malaysian, Taiwanese and South Korean buyers are in the market, targeting new apartments and townhouses in east coast cities. Perth is seeing interest from South Africa and investors from the Middle East are active in south east Queensland.

Buying a property in a city like Sydney brings them a great deal of status at home

Why are they buying here?

Overseas based buyers are investing here for a number or reasons:

1. Aussie real estate has proved a secure investment, while perennial favourites – think US shares and European bonds – have been surprisingly volatile.

2. Wealthy families are investing part of their portfolio offshore because of concerns about political stability or the sometimes arbitrary actions of government officials.

3. Purchases are tied in with establishing a residency for a family member in a safe prosperous country like Australia.

Rich Harvey, Managing Director of Sydney buyers agency propertybuy.com.au, told me that Chinese buyers have other reasons as well.

“Investors face a punitive tax regime if they buy a second property in China. Buying a property in a city like Sydney also brings them a great deal of status at home.”

 

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