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The popularity of Australia’s lifestyle and the country’s economic safety continue to attract international investors in 2018.
Despite the introduction of higher foreign ownership taxes and tighter lending restrictions in 2017, recent record sales and an influx of potential buyers to the country following Chinese New Year are positive signs that international buyers are still keen on Australia, according to agents.
Chinese property website Juwai.com lists Australia as the second favorite offshore investment destination for Chinese buyers, behind the United States. Meanwhile Melbourne continues to be their favorite Australian city, according to searches conducted on residential website www.realestate.com.au.
Prospective international buyers were inspecting property in the days following Chinese New Year, as they celebrated the holiday week with their families, said Jamie Mi, head of the international division for Melbourne real estate agency Kay & Burton.
Ms. Mi said it was a particularly busy time as foreign buyers looked for property with quality high-end finishes in close proximity to private schools and universities, in prestigious historic suburbs.
“The influx of older [established] families is uncountable,” she said. “In the last five years they were looking at the top end, but weren’t ready to buy.”
But “this year most of them are ready to buy and are very seriously looking,” she said.
Scarcity of quality property available at the top end of the market is believed to be driving some highly priced transactions, including the A$52.5 million (US$40.7 million) February sale of the historic Stonington Mansion to a Chinese buyer.
The property on Glenferrie Road in Malvern, eight kilometers from Melbourne’s central business district, set a price record, eclipsing the state’s previous record level of almost A$40 million (US$31 million).
Foreign buyers, who spend an estimated A$6 billion (US$4.7 billion) on Australian residential real estate each year, according to research firm Credit Suisse, are predominantly from Asian countries. Residents of New Zealand are the second biggest investors.
While interest in Australian property by foreigners, especially Chinese buyers, is down 18% in the year to February, due to an increase in a number of taxes, tighter lending restrictions and a slowing property market that all occurred in 2017, REA chief economist Nerida Conisbee said international house hunters continued to be attracted to the dream of Australian home ownership.
Motivation for buying has also changed, according to research conducted by Investorist, an off-the-plan property website.
Investorist’s China 2017 International Property Outlook report showed that while asset protection and wealth creation used to be the number one reason for investing outside China, that is no longer the case.
“This year, it’s more child education, lifestyle and potential migration has now bubbled to the top as the key motivator,” Investorist’s chief executive Jon Ellis said.
Melbourne Suburbs Offer Good Schools and Contemporary Apartments
In Melbourne, a foreign buyer’s checklist predominantly features suburbs steeped in history with close proximity to private schools, such as the leafy blue ribbon suburbs of South Yarra, Toorak, Canterbury, Kew and Hawthorn.
Ms. Mi said Asian buyers, in particular, look for contemporary apartments with house-like proportions or high-end residential homes, particularly those with large indoor and outdoor living areas, several bedrooms and separate butler’s pantries or kitchens.