This article is from the Australian Property Journal archive
FOREIGN investment in Australian real estate is up 27%, after overseas buyers spent $4.9 billion on residential dwellings over the financial year.
According to the ATO’s report on foreign purchases of residential real estate for the 2022–23 financial year, the number of transactions compared to the previous year was up almost 30%, with foreign buyers making 5,360 residential purchases in Australia.
At the same time, overseas purchases significantly eclipsed sales, with 1,119. Homes sold for a total value of $1.0 billion.
“The 27% increase in buying last year shows that overseas buyers were bouncing back after the travel slowdown during the pandemic,” said Daniel Ho, co-founder and managing director at Juwai IQI.
Victoria was the number one state for foreign investment, followed by Queensland, New South Wales in the third spot and South Australia rounding out the top four.
“The number of offshore buyers in New South Wales was flat, and actually decreased by 1%, from 664 to 656,” added Ho.
“Meanwhile, the number of buyers in Queensland and Victoria jumped. The number of buyers in Queensland climbed 17%, while the number of buyers in Victoria jumped 32%, by about a third. This is the second consecutive year that more foreign buyers purchased in Queensland than in New South Wales.”
The ACT took fifth place, followed by Western Australia, Tasmania and finally the Northern Territory.
Of these sales, luxury property (residential real estate worth more than $1 million) made up 78% of all transactions, compared to the previous year’s 75%.
“One fifth, or 1,169, of all the buyers were millionaire buyers purchasing property worth at least $1 million. Foreign buyers paid an average price of $914,000, which is just below the overall average price across the country of $959,300 in the March quarter, according to the Australian Bureau of Statistics,” added Ho.
Ho also highlighted that NSW was still attracting more millionaire buyers than Queensland, with 284 luxury properties bought in NSW over the year compared to Queensland’s 200.
While Victoria still saw the greatest volume of prestige buyers, with 569 overseas buyers purchasing a property worth more than $1 million.
“None of the buyers whose transactions are in the report had Australian permanent residency or citizenship at the time. In many cases, these buyers paid 7% or 8% of the purchase price on stamp duty and tens of thousands of dollars, or more, on foreign buyer application fees. And once they own their property, at least until they become permanent residents or citizens, they will pay an additional land tax every year,” said Ho.
“There is a significant wave of post-Covid migration as people act on plans they had to put on hold during the pandemic. We also see it in Southeast Asian countries like Thailand, which have seen rapid intake of their golden visa programs since the pandemic.”
