Australian property an oasis for property investment
Local and foreign investors continue to be key players in the Australian property market. Australian investors are attracted by low interest rates, favorable taxation conditions, demand for rental property and the expectation of solid capital appreciation. Foreigners are increasingly finding Australia’s stable economic and political environment attractive for investment in both residential and commercial property.
Savills Australia’s Research and Consultancy Team estimates that overseas investment in commercial property increased by 60% over the past financial year. The record figure of $5.9billion was spent on office buildings, retail assets and industrial properties. The majority (67% or $3.9billion) of this investment was from Asians, followed by North Americans (18% or $1.057billion) and Europeans (15% or $913million). Purchasing office blocks in the central business district of state capital cities was particularly popular with nearly half of these purchases over the past year being by foreign investors.
Foreign investment in residential property is even more pronounced. Global investment bank Credit Suisse estimates that Chinese buyers are responsible for 18% of residential property sales in Sydney and 14% in Melbourne (Australian Broadcasting Corporation business reporter Michael Janda).
Savills’ national head of research, Mr. Tony Crabb, expects these figures to rise. This prediction is supported by Credit Suisse which predicts that Chinese nationals alone will invest around $44billion in residential real estate over the next seven years.
The Australian Government has made conditions for investing in Australia favorable for foreign investors as a means of building the economy and supporting the prosperity of Australians. The conditions state that foreign investment in residential property must be contained to new properties as a means of stimulating the building industry. There is currently a parliamentary inquiry into foreign investment in real estate due to be handed down next month.