The number of foreign buyers snapping up Australian property has taken a significant hit, new figures show, but those that are buying here are much more likely to stay for the long term. New Foreign Investment and Review Board figures reveal overseas spending on Australian homes dropped from $8.5 billion in the 2017-2018 financial year to $6 billion between in 2019-2020, after three challenging years for Australia’s property market.
Foreign investment rule changes, the Financial Services Royal Commission and the pandemic all impacted buyer numbers, but experts say the market should turn around this year as Australia’s borders reopen and international students and new migrants return.
While total investment fell in financial terms, FIRB figures also revealed the number of property transactions dropped from 10,491 in 2017-2018 to 7482 in 2019-2020. Foreign home buyers that were still buying were most likely to purchase a property in Victoria, NSW or Queensland, according to the FIRB, with data showing 88 per cent bought there in 2019-2020.
The figures show foreign transactors were four times more likely to buy property in Australia than sell, Ho said. “These are not speculative buyers who flip the homes. In many cases, they are buying property to pass on to the next generation. While foreign buyer numbers were also down, he expected the market would see an uptick by the end of the year. In the second half of 2022 we expect stabilisation and even a modest uptick in foreign buying. Foreign students are returning, international travel is restarting and inbound immigration is rebooting. Foreign buying will have multiple drivers pushing transactions up by the end of this year.”
Expatriate buyers are looking for a larger home in Australia, rather than an apartment in New York.Some were planning ahead, buying property that they would move into in a few years’ time. Like Australian home buyers, overseas-based buyers were looking for larger homes and a better lifestyle after being in coronavirus-related lockdowns in apartments in large cities like Singapore, New York or London. bout 85.6 per cent of the properties bought were new dwellings or vacant land, with figures also showing 79 per cent of properties bought by overseas buyers were priced under $1 million.