Chinese Century - Australia

Real estate: ANZ finds foreign buyers own up to 400,000 Australian homes

https://first2move.com.au 

ANZ bank has found that foreign demand has been an important contributor to Australia's recent construction boom and is playing an increasing role in the real estate market.

Key points:

Foreign investors purchased up to 60,000 Australian dwellings in 2015-16, about 13 per cent of all residential property sold

Up to 25 per cent of newly built homes, mainly apartments, were sold to foreign investors

Between 2.5-4pc of Australian homes are owned by people who are not citizens or permanent residents

The bank's study, drawing on Reserve Bank research, estimated that foreign investors purchased between 35,000 and 60,000 dwellings in Australia in 2015-2016.

That would mean foreign buyers accounted for between 7-13 per cent of all Australian property transactions, with that proportion obviously much higher in certain locations popular with overseas investors and lower in other parts of the country.

Using FIRB data and a set of assumptions, ANZ estimated that foreign investors bought between 30,000–50,000 new dwellings in 2015–16, representing between 15 and 25 per cent of newly-constructed dwellings.

"Foreign demand is clearly one of the drivers of the strength in our dwelling investment profile," ANZ senior economist Daniel Gradwell noted.

"If this demand were to dry up suddenly, Australia's construction pipeline would likely be notably weaker than currently expected."

The bank concluded that, if foreigners are buying around 25 per cent of new apartments, this suggests around 80 per cent of foreign purchases are apartments and the remaining 20 per cent are houses, with an average price of $620,000 nationwide for 2015-16.

ANZ's conclusions have been reached after analysis of Reserve Bank and Foreign Investment Review Board (FIRB) data.

The bank has assumed that 30-50 per cent of FIRB approvals result in property purchases.

(Source: Australian Bureau of Statistics )