Juwai IQI – Mainland Chinese investment in Australian real estate surged by 16%
Investments in Australian real estate in mainland China rose 16%, according to the latest data from the state-run Foreign Investment Review Board.
Chinese invested A $ 7.1 billion in Australian residential and commercial real estate in 2019-20, up from $ 6.1 billion the previous year. Including Hong Kong, Chinese investments totaled $ 9.5 billion.
This year, Singapore investors dwarfed those in China, largely due to the activity of large public companies and mutual funds from the city-state. Singaporean companies have been approved to purchase A $ 9.5 billion worth of Australian real estate.
In total, foreigners from all nations were approved to purchase residential real estate worth US $ 17.1 billion – 15.5% more than last year. Commercial real estate investments worth $ 38.8 billion have also been approved.
“Australia is more dependent on foreign investment than most countries,” said Georg Chmiel, Co-Founder and Executive Chairman of the Juwai IQI Group. “Foreign investment flows, on average, about 3.3% of Australian GDP, compared to 1.5% for G20 countries. This dependency is of course particularly high in the real estate sector due to the high investment requirements.
“In the midst of the global tribulation of 2020, Australia performed relatively well. Investment in Australia declined only slightly more than total global cross-border investment.
“When it comes to cross-border home buyers, Australia is now more attractive than ever. Only closed borders and the inability of foreign students to personally take phone calls in Australia are holding back foreign housing investments today.”
Chmiel said foreign investment in Australian residential real estate increased 15.5% to $ 17.1 billion. Given the difficult global environment in the first half of 2020, that is a surprising increase.
“Residential real estate accounts for approximately 9% of the total value of foreign investment and 86% of all approved applications. Victoria approved more residential real estate investment than any other state, at 43%.
“New South Wales and Queensland have the second highest number of approved residential real estate investments – 19% of the total.
“This is a great achievement from Queensland, which is quickly becoming a top destination for foreign investment. Queensland used to be second in distance but is now tied in second place. Queensland has the advantage of lifestyle, fewer traffic jams and lower prices. New South Wales is struggling with high home prices, and even foreign buyers are sensitive to the unaffordable suburbs. “
Chmiel said although the FIRB data only extends through June 2020, recent data from Juwai IQI shows that Chinese buyer inquiries for Australian apartments rose 50% year over year in the first quarter of 2021.
“Chinese demand has been surprisingly stable, but we are not sure that the transactions will close at the same rate. The Chinese are already looking past the pandemic, which in most parts of China no longer has much of an impact on daily life other than making international travel very difficult.
“We expect transactions to soar relatively steeply after the borders are reopened next year.”
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