Victoria leads nation for foreign investor demand, China leads the pack | Foreign Investment Review Board
Millionaire foreign investors have Victorian homes in their sights with more purchases than any other state. And experts have warned they could be driving up house prices.
Millionaire Chinese investors are splashing massive sums on homes and market pundits believe they are driving prices up in pockets of Melbourne.
It comes as the latest foreign investment data from the federal Treasury shows Victoria is the nation’s top address for internationals buying property, while separate data from PropTrack shows China-based searches for Victorian homes are centred on Melbourne’s CBD, Balwyn, Balwyn North, Camberwell and Glen Waverley.
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Treasury reports released yesterday show China was the main source for approved residential real estate investment proposals in Australia for the 2023-24 financial year so far, leading the way with $1.5bn in the six months from July to December last year.
But that’s likely to be down on the 2022-2023 financial year, when $3.4bn came in from China-based investors.
In the final three months of last year, Chinese nationals invested $800m in Australian homes. Hong Kong, India, Vietnam, and Taiwan-based buyers added a further $400m combined.
A second report released by the government’s Foreign Investment in Australia office yesterday shows there were 2240 Victorian homes sold to offshore investors, twice the 1121 transactions recorded in the next most sold state of Queensland.
While only Australian citizens and permanent residents can buy established property, international investors can apply for permission to buy new residences through the Foreign Investment Review Board (FIRB).
Overall, in the 2022-2023 financial year, foreign buyers splashed $4.9bn on 5360 Australian residences – a 27 per cent surge on the previous 12 months.
International real estate company Juwai IQI co-founder and group managing director Daniel Ho said overseas buyers were bouncing back after the Covid pandemic.
“Victoria got by far the most millionaire buyers, with 569 foreign buyer transactions worth over $1 million each,” Mr Ho said.
His firm’s figures show the city’s CBD, Point Cook, Doncaster, Southbank and Toorak were the top the areas mainland Chinese buyers inquired about, but he said a range of research and even a parliamentary inquiry had found foreign investors boosted housing supply but did not drive up prices.
However, Morrell and Koren buyer’s advocate to Melbourne’s top end, David Morrell, said he had actually seen the opposite occurring in suburbs including Toorak, Canterbury, Camberwell and Box Hill since last year.
“People want to get their money out of China and into a safe haven, and buying in a prestige property market like Toorak is as safe as you can get,” Mr Morrell said.
Some foreign purchasers pushed property prices up by millions, Mr Morrell added.
Harcourts Judd White director Andrew Dimashki said demand from overseas-based investors and buyers had helped drive median house prices in Melbourne’s eastern corridor up to by 200 per cent, for select suburbs, in the past decade.
In April, competition among international purchasers for a six-bedroom Glen Waverley house drove the sale to a $3.9m result despite a $3.4m reserve.
“There’s a lot of immigration and a lot of high-end buyers are coming in from overseas,” Mr Dimashki said.
“They have no problem spending a bit more than what a property’s worth, it’s just competition.”
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Originally published as Victoria leads nation for foreign investor demand, China leads the pack | Foreign Investment Review Board
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