‘Revenge buying’ spree as overseas demand for Aussie homes soars

Overseas demand for homes to rent and buy has surpassed pre-pandemic levels after a surge in ‘revenge buying’.

Foreign demand for Australian properties has surpassed pre-pandemic levels following another spike in overseas-based searches for homes to buy and rent.

There was a particularly large spike in searches originating from New Zealand and mainland China, with the volume of China-based searches of homes to rent now double what it was in 2019.

A large share of the prospective Chinese renters perusing listings were estimated to be those on student visas and suburbs surrounding top universities were the most popular locations for them to search.

Mainland China also accounted for the biggest rise in overseas searches of properties available to buy over the past year at 37 per cent, according to PropTrack’s latest overseas search report.

The ruling Chinese Comunist Party announced that online degrees from abroad would no longer be recognised, driving an increase in student arrivals into Australia. Picture: AFP

Daniel Ho, the co-founder of international property group Juwai IQI, said Chinese homebuyers had “engaged in some revenge buying” after three years of travel restrictions during Covid.

Most Chinese were purchasing for their use and are on the path to becoming new Australian citizens, Mr Ho said.

“Chinese buyers aren’t done yet,” he said. “Flights have not gotten back to their pre-Covid levels. There are delays obtaining passports and visas. Many Chinese holding Australian permanent residency still have not yet made the move.”

The surge in China-based searches came amid a rise in demand from buyers and renters in multiple countries.

PropTrack noted that searches from all prospective buyers based overseas increased by 11.5 per cent over the past three months, while rental searches rose by 7.8 per cent coming off an already high base.

The Melbourne CBD is the most popular market for overseas based buyers and renters. Picture: David Caird

It’s resulted in more overseas-based renters and buyers perusing Australian real estate than they did in 2019, the year before Covid-related international border closures.

Some of the other biggest increases in demand were reported from property seekers based in New Zealand and the United Kingdom.

The biggest annual increase in rental searches was from New Zealand, with the volume rising 38 per cent over the period, while the increase from the UK was 15 per cent. New Zealand also accounted for the most rental searches overall.

Peter Li – the director of One Agency, which helps connect international buyers with Aussie real estate opportunities – said changes in the global economy were driving up demand from overseas.

“People go to where the money is,” he said. “The economic situation, especially in China, would be pushing some people to move to Australia now. People can’t make as much money there as they could before and they see Australia as an opportunity.”

China-based rent searches spiked by 25 per cent and are now double what they were before the pandemic, according to the PropTrack report, which measured foreign activity on realestate.com.au.

Melbourne was the top destination for overseas property seekers in general over the past quarter, with PropTrack noting this was likely due to its strong commerce and study sector.

Sydney was the second most popular location for overseas renters, followed by the Gold Coast.

PropTrack economist Paul Ryan said the recent bump in searches from overseas renters and buyers was a continuation of a trend that started in early 2022 when Australian borders were reopened.

“We’d expect more arrivals early next year as, seasonally, that’s the time of the year when we get a lot more student arrivals,” Mr Ryan said.

In July 2023, arrivals from migrant workers and students hit the highest level since January 2020, averaging 265,000 new arrivals each month over the past six months, according to the ABS.

Ray White-Corporate head of research Vanessa Rader told a recent Future Cities panel that councils were not planning enough student accommodation to cater for the increased demand.

“We acknowledged the fact we needed student accommodation pre-Covid but it just stopped with the lockdowns and approvals stopped going through,” she said.

PropTrack senior analyst Karen Dellow said Australia already has a shortage of available properties.

“Ultimately, more properties are needed to accommodate increases in population and, consequently, housing demand. Currently, there is not enough new development taking place to provide sufficient housing for the increase in population forecasted for the coming years.”

Originally published as ‘Revenge buying’ spree as overseas demand for Aussie homes soars