The FIRB’s latest report has revealed where most of Australia's foreign residential investors are from.
The Quarterly Report on Foreign Investment (1 July to 30 September 2023) released by the Foreign Investment Review Board (FIRB) has revealed China has the largest source of approved residential real estate.
According to FIRB, China claimed the top spot by number and value at $0.7 billion, followed by Hong Kong SAR, Vietnam, India, and Taiwan (all at $0.1 billion).
Overall, the number of residential real estate investment proposals approved was 1,374, valued at a total of $1.5 billion during the first financial quarter.
Commenting on the report findings, Juwai IQI co-founder and group managing director
Daniel Ho said: “China is still the number one investor, but what we see with our clients is that fewer offshore Chinese and Hong Kong buyers are purchasing.
“Instead of buying as non-residents, most are waiting until they have permanent residency in Australia. If you know you’re on the path to getting permanent residency, there is no reason to pay the extra costs that come with purchasing as a non-resident.
“That means the extra stamp duties and the uncertainty of the FIRB process. Also, owning property as a foreign buyer, with land tax and vacancy tax, is more expensive than owning is after you have permanent residency.”
According to Mr Ho, Chinese and other Asian buyers are set to purchase more property in Melbourne this year than they did in 2023.
“Chinese buying will grow more quickly than purchasing by other Asian countries because it is still coming back from its relatively late opening from the pandemic,” he added.
“Overall, purchasing will be driven by relatively strong economies and Australia’s attractiveness for investment and lifestyle.”
Preceding this report, the Albanese government announced that it has introduced legislation to adjust the foreign investment framework in order to help “boost Australia’s housing stock and provide more homes for Australians”.
“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,” Treasurer Jim Chalmers stated.
Announced in the Mid-Year Economic and Fiscal Outlook (MYEFO), the changes include:
• Tripling foreign investment fees for the purchase of established homes.
• Doubling vacancy fees for all foreign-owned dwellings purchased since 9 May 2017 (which would result in a sixfold increase in vacancy fees for future purchases of established dwellings).
These changes are a component of the Albanese government’s agenda to improve housing affordability and supply, which already includes the Commonwealth Rent Assistance, the $2 billion Social Housing Accelerator, the $3 billion New Homes Bonus, and the $10 billion Housing Australia Future Fund.
“These changes further encourage foreign nationals to buy new property instead and help to ensure that those who do get approval follow the rules,” Mr Chalmers added.
“The increased vacancy fees will encourage foreign investors to make their unused properties available to renters.
“We will always put Australian interests first and this means ensuring Australians benefit from foreign investment in Australia.”
[RELATED: Government introduces foreign investment legislation]