New Report Shows Foreign Investment Remains Strong

One indicator of a strong market property is the amount of interest shown from foreign investors.  This is why the latest Foreign Investment Review Board (FIRB) Annual Report makes interesting reading for anyone thinking of investing in property this year.[1]  According to their figures, foreign investment shows no sign of slowing, and analysts suggest that this will continue well into the future.

Analysis of the FIRB figures showed the following results:

  • Foreign investment has grown during the past year with an increase of over 75%, with China leading the way.  Chinese investors accounted for over $24 billion worth of property during the 2014-2015 timeframe.
  • US investors accounted for the second biggest group of foreign investment, spending over $7 billion on Australia property during the same period.
  • Singapore came in third, at almost $4 billion worth of applications, with Malaysia and South Korea recording $3.4 billion and $2.5 billion in investment respectively.
  • New dwelling approvals made up the majority of the increase in the real estate market, with 37,347 approvals in 2014-15, compared with 23,428 approvals in 2013-14.
  • No applications for investment were rejected during this time, although conditions were applied to around a fourth of all foreign investment approvals.

Advantages of A Strong Foreign Investment Framework

There have been a number of changes made to the foreign investment rules in the past few months, with banks and other lenders also tightening requirements for investment mortgages from foreign applicants.

Interestingly, some analysts believe that the introduction of tougher rules for foreign investors starting in December 2015 will simply add additional confidence to the market, with the majority of investors being attracted to a strong and well regulated industry.  Particularly among Chinese investors, the concept of a strong investment framework will be a drawcard as they seek a long term investment for family members.

The focus on encouraging foreign investors to focus on new dwellings will also help to drive the already buoyant off the plan and brand new property market, especially in the major capital cities.   The key in this market for anyone looking at investing in property is to be well prepared and conduct thorough research about potential opportunities.  Getting assistance from industry professionals such as Ironfish can also help you to focus on a strategy that works for you – rather than just going out and buying the first property or off the plan apartment you come across.



[1] https://firb.gov.au/about/publication/annual-report-2014-2015/

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