The housing market is hot right now as prices and values across Australia continue to rise.
With interest rates still at record lows, many are taking the opportunity to dive into investment properties. Some analysts believe that international buyers are the cause for the continual increase in housing costs.
However, foreign investment in Australian property has decreased dramatically in the last five years. The Foreign Investment Review Board’s recent survey shows that international buyers’ purchasing activity hit record lows, with residential real estate approvals for foreigners falling from 40,141 in 2015-16 to 7,056 this year.
Why Are Internationals Purchasing Australian Property?
Simply put—because they can. But let’s face it, many real estate agents aren’t helping matters for Australians. Why? Because many international buyers are able to pay with cash. There is no financing, so it’s a matter of prompt exchanges and ease of settlements.
Plus, Australia is like a safe haven for preserving wealth and comprehensive protection for international buyers from all over the world. Some have compared the property market in Australia to a Swiss bank account.
Who’s Buying Property in Australia?
Numbers don’t lie. Thanks to closed borders, many international buyers haven’t had the ability to purchase property in Australia. Many international property investors are waiting for the borders to completely re-open before jumping into the Australian property market. Currently, the Australian government is looking to re-open its borders in mid-2022.
Many Australians believe that Chinese investors were the international investors buying the most property in Australia in recent years; however, in recent months, Singapore surpassed China.
According to a current report by Juwai IQI, Singaporean investors have acquired $19.3 billion in local real estate over the past two years. This puts them several billion dollars ahead of Chinese entities, who accounted for just $13.2 billion.
It’s also important to note that the investors purchase different types of properties. The Chinese are purchasing more residential properties while the Singaporeans are investing more in commercial property and development.
Moving Forward
According to Juwai IQI analysts, “The Australian market is already strong despite the lack of migration. Further upward price pressure will likely result as inbound migration resumes. That rapid price growth attracts buyers eager for a safe investment and afraid of missing out on an opportunity,” they wrote in a new global report.
“Many buyers have not purchased during the pandemic, and some will make those transactions in relatively short order when borders re-open.”
When the borders open, the nation is expecting a large influx of migration. The drastic increase in the population will put pressure on the housing market. The cost of housing has been increasing despite lockdowns, border closures, and decreased population.
What does this mean for you? Buy now. If you’ve been considering investing in property, now is the best time. Purchase before the borders re-open, while interest rates are still low (1.99%), and the banks are willing to lend money.
We Can Help
Ready to start creating passive income with property? Think you’re ready to invest in one or more properties?
We can help! At OneCorp, we walk you through every step of the process at NO cost to you. We create a personalized property strategy and help you find the best opportunities on the market so you know you’re getting the best return.
Getting started on your investment property journey has never been easier:
- We start by helping you set clear goals and objectives as to what you want to achieve through property investment.
- From there, we run the numbers through proprietary software to accurately assess exactly what you need out of a property portfolio to achieve those goals.
- Lastly, we find the perfect property to make those objectives a reality!
