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While the USA remains the biggest foreign investor in Australian real estate, China is playing catch-up.
The latest annual report from the Foreign Investment Review Board (FIRB) showed a surge in foreign buyer investment across the 2019–20 financial year, with over $55 billion committed in residential and commercial real estate.
Over the 12 months, offshore buyers were approved to spend $17.1 billion on residential real estate in 2019–20, up from $14.8 billion reported in the previous year.
Meanwhile, commercial real estate investment clocked $38.8 billion from the year prior’s $73 billion.
“When it comes to cross-border real estate buyers, Australia is now more attractive than ever,” according to Juwai IQI executive chairman Georg Chmiel.
He said: “Only the closed borders and the inability of foreign students to attend Australia in person is holding back foreign residential investment.”
Of the states and territories, New South Wales saw the highest level of proposals for foreign real estate investment at $12.75 billion, of which $1.7 billion was directed towards residential real estate and $11.05 billion came from commercial real estate pursuits.
Victoria followed with $7.48 billion, then Queensland with $4.26 billion, South Australia with $1.83 billion, Western Australia with $1.1 billion and the Australian Capital Territory with $1 billion.
Proposed investment in real estate per state and territory
|
State/Territory |
Residential |
Commercial |
Total |
|
ACT |
$300 million |
$700 million |
$1 billion |
|
New South Wales |
$1.7 billion |
$11.05 billion |
$12.75 billion |
|
Northern Territory |
N/A |
$200 million |
$200 million |
|
Queensland |
$1.4 billion |
$2.86 billion |
$4.26 billion |
|
South Australia |
$200 million |
$1.63 billion |
$1.83 billion |
|
Tasmania |
$100 million |
$100 million |
$200 million |
|
Victoria |
$3.5 billion |
$3.98 billion |
$7.48 billion |
|
Western Australia |
$400 million |
$700 million |
$1.1 billion |
|
Various |
$9.5 billion |
$18.51 billion |
$28.01 billion |
The United States remains the largest source country for approved proposed real estate investment by value at $13.09 billion, falling from 2018–19’s $19.6 billion.
Singapore followed with $9.5 billion, then China with $7.11 billion.
Interestingly, analysis from Juwai IQI determined that China-based investments rose by $1 billion (17 per cent) from the previous year’s $6.07 billion — marking the first time that mainland Chinese investors increased their annual spend since the 2015–16 financial year.
Following China is Germany with $3.68 billion, then Canada with $3.30 billion, Hong Kong and France with $2.41 billion each, the United Kingdom with $1.58 billion, Thailand with $1.36 billion, the Netherlands with $1.08 billion and Japan with $1.05 billion.
Germany and Thailand saw the highest annual growth in proposed real estate investment at 246 per cent and 67 per cent, respectively.
Other top foreign investors in Australian real estate are the United Arab Emirates, Saudi Arabia, Malaysia, New Zealand, Switzerland, the Philippines and Ireland.
According to Mr Chmiel, investment in Australian real estate is likely to continue improving, as the country has proven itself to be “a relative island of safety and good management” since the onslaught of COVID-19.
“Australia’s roaring property market is incredibly appealing to anyone who wants to make a good investment — those who like to buy into rising prices because they think they are more likely and more quickly going to make a profit,” Mr Chmiel said.
“We expect transactions to climb relatively steeply once borders reopen next year.”
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