- A 15.5% increase in residential real estate purchases by foreign investors
- Overall, a $52B investment in real estate
- United States lead the way followed by Singapore and China
The Foreign Investment Review Board (FIRB) has released its annual report which has shown a surge in foreign buyer interest in residential Australian real estate during the last financial year.
Residential Property Investment
According to the report, last year there was a 15.5% increase in demand for Australian real estate from foreign buyers, from $14.8 Billion to $17.1 billion.
This is the highest level in three years – 2018-19 saw $14.8 billion and $12.5 billion in 2017-18 – however, this is significantly lower than the $30 billion recorded in 2016-17.
Foreign Investment into Australian Residential Property, 2016/17 –
The decline since 2016-17 is attributed to a few factors: tightened domestic credit, increased restrictions on capital transfers, increases in foreign resident stamp duty and foreign investment application fees were seen as the main reasons.
Additionally, an exemption certificate was introduced requiring only one approval for individuals considering a number of residential properties, although they must have the intention to purchase only one property.
Due to the report covering the 2019-20 financial year, it should be noted this includes the first few months of the pandemic but arguably not the economic rebound experienced since.
Total real estate investment
Overall, $52.7 billion of real estate investment from foreign buyers to Australia was recorded: residential, commercial and land.
The United States led the way with $13 billion worth of real estate approved followed by $9.5 billion from Singapore and $7.1 billion from China.
Many European countries have also made significant investments in Australian real estate – Germany accounts for $3.68 billion and France $2.4 billion.
Our neighbours across the ditch have invested relatively little by comparison: only $32.5 million came in from New Zealand. To put this into perspective, Malaysia invested over half a billion while the United Arab Emirates invested $688.1 million.