The Sydney suburbs foreign buyers are targeting

Overseas interest in Sydney real estate is booming and these are the suburbs foreign buyers want to live in the most.

Sydney property agents are bracing for another wave of frantic real estate spending during the coming Lunar New Year and beyond as more home seeking migrants stream into the city.

New data from PropTrack showed global interest in the NSW market has been rising, with overseas searches of local real estate increasing 12 per cent over the last year.

The increase followed what was a busy year for real estate transactions in 2022 as pent up demand was released into the market following the reopening of international borders.

The coming rush of new interest this year is expected to put further strain on the city’s already stretched supply of housing, with overseas buyers often competing for the same stock as local first homebuyers.

Fiona Yang, executive partner and Peter Li, managing director of Plus Agency who specialise in selling to overseas buyers are expecting a busy 2024. Picture: Sam Ruttyn

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Among the suburbs attracting the highest volume of searches were the Sydney CBD, Zetland, Surry Hills, Randwick, and Chatswood, according to PropTrack. Other popular suburbs were Bondi, Chippendale and Manly.

The biggest source of overseas-based searches was the United States and United Kingdom, where a sizeable population of Australian expats reside, many wanting to return to Aussie shores.

There were also high volumes of searches from mainland China, Hong Kong, Singapore and India.

Experts told The Saturday Telegraph that most of the overseas searches of NSW real estate from these Asian countries were from those with pre-obtained permanent residency who wanted to migrate to Australia.

A three bedroom townhouse in Killara sold by executive partner Fiona Yang at Plus Agency to a mainland China buyer for $3.45m.

There was also a sizeable volume of investor interest, with China accounting for the largest share of purchases among those without permanent residency or citizenship, according to Juwai IQI and Treasury figures. Such investors are restricted by law to buying new homes.

Fiona Yang and Peter Li of Plus Agency, a group that specialises in selling homes to new arrivals and foreign investors, said some overseas-based searches were often parents helping their adult children.

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Ms Yang said a lot of their clients’ parents were joining them to celebrate Lunar New Year and helping with the property search while they were here.

Fiona Yang and Peter Li from Plus Agency said many overseas parents were helping boost their clients sales. Picture: Sam Ruttyn

Ms Yang said it’s been a busier lead up to the Lunar New Year (February 10) than usual.

“(Our office) have made about 10 sales with our overseas clients over the Christmas and Lunar New Year period. Around five years ago it would be a quiet period and everyone would be travelling overseas,” Ms Yang said.

Mr Li said that with the help of their clients’ parents, this had boosted their sales, with buyers expanding their budgets from one to two bedroom apartments with a view.

“The parents came over to push them to complete the transaction. Asian parents always try to help their kids have a better home,” Mr Li said.

A two bedroom Meadowbank apartment sold by Plus Agency to a Hong Kong buyer for $875,000 in December.

“Another portion of the buyers are parents who have an idea that some day they will move here with their children who already live here – even though the children don’t want them to,” he said.

Plus Agency has made more than $200m in annual sales, and are expecting more people to jump into the market this year.

“Sydney prices keep going up, we are going to run into that issue of ‘how are you going to afford a property’ but if you don’t own a property the rent is going to kill you” Mr Li said.

Plus Agency expect more buyers will want to jump into the market escape the rental crisis. Picture: Sam Ruttyn

Buyers from China and Hong Kong make up the majority of overseas buyers that don’t have permanent residency, but Mr Li said they were expecting fewer transactions from nonresident foreign buyers due to the increased taxes they have to pay.

This comes after Labor this week quietly axed the Significant Investor visa, a business visa program which makes up a quarter of the nation’s migration allocations.

The visa allowed foreigners to live in Australia if they made investments to the value of at least $5m.

Daniel Ho, co-founder of international real estate technology group Juwai IQI, said the visa changes affected a small, elite group.

“We don’t believe the scrapping of the scheme will result in luxury buyers defecting to other countries, because their primary motivation is to come to Australia, not to take advantage of the visa,” Mr Ho said.

Mr Ho said these buyers are interested in new luxury apartments in areas including Mosman, Bellevue Hill and Sydney’s North Shore.

This Bayview home sold to Chinese billionaire “Alan” Wang Qinghui for $11m in November who also reportedly owns other high end properties in NSW.

“If this door closes on them, they will seek another way to obtain Australian residency,” he said.

The exact impact on overseas demand on prices is hard to measure, but Mr

Ho said Chinese buying in the Australian market is recovering quickly after plummeting during the pandemic.

“Our internal data suggests that Chinese buying of Australian residential property is probably around three-quarters of the 2019 level. We expect it to keep climbing in 2024,” he said.

Ray White chief economist Nerida Conisbee said some level of offshore investment into the housing market was needed to keep new construction ticking along. This was because developers often relied on pre-sales to foreign investors to bankroll their new projects.

“Offshore money plays a critical role in housing supply and over the last five years, that has decreased,” Ms Conisbee said.

“In 2016 there was around $70b in foreign investment and we saw lots of apartments being built in places like North Ryde and Parramatta, now that figure is less than $10b.”

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