Foreign investment tumbles in Australian residential real estate
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Foreign investment tumbles in Australian residential real estate

China was the largest source of approved residential real estate investment in the past quarter

By Bronwyn Allen
Tue, Feb 20, 2024 10:11amGrey Clock 2 min

The number of approvals for foreign purchases of residential property fell in the first quarter of FY24, according to the latest statistics released by the Foreign Investment Review Board (FIRB). China remains our biggest source of residential investment, followed by India and Hong Kong.

The FIRB approved 1,374 applications from foreign residents to buy residential real estate between 1 July and 30 September 2023 (1Q FY24). This represented $1.5 billion in investment. This is significantly lower than the previous quarter and is tracking well below the rate of investment in 2023. Between 1 April and 30 June 2023 (4Q FY23), the FIRB approved 1,932 applications worth $2.4 billion. For the full financial year of 2023, 6,576 proposals were approved, thereby averaging 1,644 per quarter.

In 1Q FY24, China was the largest source of approved residential real estate investment with 523 approvals worth $700 million. Making up the top three were India with 148 approvals worth $100 million, and Hong Kong with 111 approvals also worth $100 million.

The fall comes amid the Federal Treasurer Jim Chalmers introducing legislation into the Parliament earlier this month to significantly raise foreign investment application fees, as per his announcement in the Mid-Year Economic and Fiscal Outlook. Currently, foreign investment application fees start at $14,100 for purchases of residential property worth $1 million or less, and rise to a maximum of $1,119,100 for acquisitions worth more than $40 million.

The Albanese Government wants to triple the fees for the purchase of established homes, which foreigners are allowed to buy if they are living in Australia to work or study, and must sell when they leave. Dr Chalmers explained that the government hopes this will encourage foreigners to buy new property instead. This will help create additional housing stock, jobs in the construction industry and support economic growth,” he said.

The government also wants to double the vacancy fee charged to foreign owners whose properties are not genuinely occupied as a residence either by themselves or a relative, and are not rented out on a lease term of more than 30 days for at least six months of the year. The vacancy fee is the same as the applicable application fee in each case, hence $14,100 on properties purchased for $1 million or less.

On Census night 2021, more than one million homes in Australia were unoccupied, which created fierce national debate about home ownership affordability and rental supply for Australians. The increased vacancy fees will encourage foreign investors to make their unused properties available to renters,” Dr Chalmers said. The government is also proposing a reduction in application fees for build-to-rent projects to encourage more foreign investment in this emerging real estate sector.

“Higher fees for the purchase of established homes and increased penalties for those that leave properties vacant will help ensure foreign investment in residential property is in our national interest,” Dr Chalmers said.

FIRB application fees were first introduced in 2015. They are indexed to annual inflation but have been increased markedly several times by governments in response to public discourse over the impact of foreign investment on rising property prices. Real estate industry insiders say rising fees are dissuading some foreign nationals from investing here.



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Australia’s top 10 most affordable regional property markets investors should watch

Whether you prefer the country or the coast, there are plenty of east coast options for cashed up buyers

By Bronwyn Allen
Fri, Apr 19, 2024 3 min

There are 10 local council areas scattered along the East Coast of Australia that offer both affordability and solid fundamentals for sustainable future growth, according to the research team at residential property network, PRD. The areas have been selected based on five criterion. They are affordability – defined as a median house price below $600,000, rising house values, strong rental yields to encourage investment, a strong pipeline of residential, commercial and infrastructure projects to facilitate local economic development, and low unemployment.

Here are Australia’s 10 most affordable regional property markets with great future potential.

Mackay, QLD

Mackay is a tropical coastal area located in north Queensland. It’s known for its closeconnection to the Great Barrier Reef. The median house price is $462,750, up 8.9 percent in 2023. Mackay attracts a lot of interstate migrants and is home to more than 120,000 people. It has a healthy economy with an unemployment rate of 3.7 percent and $1.7 billion worth of projects due to commence this year.

Toowoomba, QLD

The Toowoomba median house price was up 10.9 percent in 2023.

Toowoomba is located west of Brisbane and is known for its Victorian buildings, street artand surrounding national parks. The median house price is $560,000, up 10.9 percent in 2023. The city has a population of more than 180,000. The unemployment rate is 4 percentand there is $6.1 billion in projects commencing in 2024.

Townsville, QLD

Townsville is a coastal city in north-eastern Queensland. The median house price is $420,000, up 5 percent in 2023. It is home to more than 200,000 people. Unemployment is very low at 2.5 percent and there is $3.2 billion of projects commencing this year.

Dubbo, NSW

Dubbo is located west of Newcastle in the Orana Region and is home to the Western Plains Zoo. The median house price is $530,000, up 11.6 percent in 2023. The population has exploded in recent years to more than 56,000 people. The unemployment rate is just 2.2percent and the economy is thriving. There is a pipeline of $4.7 billion in projects commencing this year.

Tamworth, NSW

Located in north-east NSW, Tamworth is known for its popular annual Country Music Festival. It’s also the largest retail centre for the New England and Northwest Slopes regions. The median house price is $490,000, up 14 percent in 2023. With a population of more than 65,000 people, the economy is strong with unemployment of just 2 percent and $112.4million worth of projects commencing this year.

Griffith, NSW

Located west of Sydney and northwest of Canberra, Griffith is known for its prime produce production and wine cultivation. The median house price is $531,000, up 2.1 percent in 2023. Griffith’s population is about 27,000 people. The city boasts high economic resilience with a 2 percent unemployment rate and $258.7 million in projects in the pipeline.

Ballarat, VIC

Ballarat, Victoria

Ballarat is a 1.5hour drive west of Melbourne. It’s popular with city commuters who move here for housing affordability and a relaxed lifestyle with easy access to the city via train. The median house price is $570,000, down 4.2 percent in 2023 but up 92.9 percent over the past decade. The city has the third highest population in Victoria at about 118,000. Ballarat has an unemployment rate of 3 percent and a total projects pipeline worth $2.3 billion for 2024.

Shepparton, VIC

Shepparton is a rural area about two hours north of Melbourne. It is popularly referred to as the food bowl of Australia. The median house price is $475,000, up 4.4 percent in 2023. The population is about 70,000. The unemployment rate is just 2 percent and there is $1.8 billion in projects for 2024.

Wodonga, VIC

Wodonga is located on the border of NSW on the southern side of the Murray River. It is approximately 320km from Melbourne and 345km from Canberra. The median house price is $567,250, up 4.7 percent in 2023. With a population of about 44,000, the city’s jobless rate is 3 percent and there is $388.2 million in development set to commence in 2024, primarily new infrastructure.

Burnie, TAS

Burnie is a bustling port city located in Emu Bay in Tasmania’s north-west. Overlooking beaches and parklands, the area is known for its rich agriculture and mining projects. The median house price is $435,000, up 3.6 percent. Despite a rising population, the unemployment rate is falling and is currently 5.6 percent. In 2024, Burnie’s project pipeline is valued at approximately $1.6 billion. A significant portion is commercial development, primarily renewable energy projects.

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11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

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