Australia reviews foreign investment laws
Chinese buyers are snapping up 18 per cent of new homes in Sydney, according to one report Photo credit: 8LettersUK
International demand for Australian property has grown significantly in recent years, driven by buyers from China and other Asian markes. Indeed, according to Real Capital Analytics, 74 per cent of overseas investment in residential Australian property came from China, Singapore, Hong Kong, Malaysia and India. A report from Knight Frank in February 2014 found that Australia remained the biggest recipient of Chinese outbound direct investment in real estate.
Demand has grown to the extent that even on TheMoveChannel.com, where Australian property is not particularly prominent, Oz has shot up the charts to become the eighth most popular country on the portal.
According to a recent report from Credit Suisse, Chinese buyers - attracted by the country's stable economy and relatively low taxes - are investing £2.7 billion in the country's housing market every year, snapping up 18 per cent of new homes in Sydney and 14 per cent in Melbourne. As a result, house prices have rocketed 45 per cent in the past five years in Sydney, leaving domestic buyers priced out of their own property.
Credit Suisse forecasts the investment totals to rise to $44 billion in the next seven years.
Canada's recent decision to Change its residency scheme for Chinese buyers is expected to send even more investors Down Under. Now, though, the Federal Parliament'se House Economics Committee is examining the country's laws.
The inquiry will be chaired by Victorian MP Kelly O'Dwyer, reports The Australian. Speaing to ABC Radio, she said: "The great Australian dream is to own your own home and we know that's pretty difficult even with two incomes and lots of years of savings and a large mortgage so we want to make sure we’re not making it even more difficult."
The Foreign Investment Review Board confirms that it is the Government's policy that "foreign investment in Residential Real Estate should increase Australia's housing stock".
"That is, the policy seeks to channel foreign investment in the housing sector into activity that directly increases the supply of new housing (such as new developments of house and land, home units and townhouses) and brings benefits to the local building industry and its suppliers."
The inquiry will determine whether this is still the case.