Foreign investors buy $5.3 billion worth of Australian residential real estate

Foreign investors have snapped up thousands of homes, worth billions, across Australia as buyers’ agents say they are ‘blowing up the market’. Find out where.

Foreign investors have snapped up thousands of homes across Australia  – with residential purchases by international buyers reaching a $5.3 billion in value.

New data released by Federal Treasury has revealed more than 4700 homes were purchased by foreign investors in the first nine months of 2023.

A buyer based in Hong Kong has paid about $17m for the Lavender Bay mansion owned by Rugby Australia chairman Hamish McLennan and his wife Lucinda. 11 King George St, Lavender Bay

But   PropTrack Economic Research director, Cameron Kusher has assured first home buyers – desperately trying to claw their way into the property market – they wouldn’t be impacted by the cash splash of international buyers looking to Sydney’s most prestigious suburbs for their next purchase.

The latest Treasury statistics from the register of foreign ownership of residential real estate confirmed 1955 homes were bought by Chinese investors, with an estimate  $2.5bn  in value.

 The data revealed Hong Kong investors purchased more than 400 homes, with an estimated residential real estate value of $300m, followed by Vietnamese buyers snapping up 259 properties and Taiwanese buyers picking up 272 homes across Australia.

The register is yet to release the figures for the final three months of 2023.

Meanwhile, a Federal Treasury review of the foreign investment register found  664 homes were bought in NSW in the 2021-22 financial year, equating to an investment value of $1.012bn.

Mr Kusher said international investors made up a “very small portion” of Australia’s competitive real estate market.

“International investors are buying up higher-end property, out of reach of first home buyers,” he said.

“International investors are not impacting the lower end of the market.”

The PropTrack director said the were “questions that could be raised” around the fact that Chinese investors were buying up property in Australia, while Aussies were unable to purchase property in China.

“Meanwhile, there are residents genuinely keen to get out of Hong Kong, so there could be intent to immigrate to Australia,” he said.

 “Australia is a popular destination for international investors, but these overseas buyers are not impacting the market.”

Cohen Handler buyer’s agent Simon Cohen says foreign investors are not affecting the first-homebuyer market. Picture: Brook Rushton

The founder Australia’s largest residential property buyer’s agency Cohen Handler, Simon Cohen told the Saturday Telegraph that international investors flock to Sydney in droves because: “It isn’t just a beautiful city with prime real estate, it is a city with evidence of incredible investment returns”.

“Sydney is the perfect place for overseas buyers to park their money, but they need to do it in a way that won’t drive up the local market,” he said.

The Liu family, from China, bought 35 Mandalong Rd in 2019 for $8.6m and set about a no expense spared refurb with bedrooms the size of small apartments, windows imported from Spain and marble from Italy. 35 Mandolong Rd, Mosman, NSW Real Estate

“We see it time and time again, investors paying prices that they do not have to, to the detriment of the local luxury market - they are blowing up prices.

“They offer well over market value, either because they haven’t been educated on prices or they want it at any cost.

“Some international buyers are offering millions over the market value and that effects the market in a bad way,” he said. The leading buyers agent, who has seen a major up-tick in international interest, said buyers were targeting suburbs including Bellevue Hill and Vaucluse, and are “drawn to these areas for the schools and the views”. 

Isabella Lucas

Mr Cohen’s associate at Cohen Handler, Isabelle Lucas, said Sydney’s stable market for investments has attracted and continues to attract international buyers on a weekly basis.

“Proximity to good schools, beaches, proximity to the city - it’s a very attractive lifestyle,” Ms Luca said.

“Proximity to good private schools is definitely a trend we’re seeing in international buyers at the moment, that’s something we’ve honed in on the Eastern suburbs particularly,” she said.

“We’re seeing a big influx of international buyers attracted to the Bellevue Hill market.”

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Originally published as Foreign investors buy $5.3 billion worth of Australian residential real estate