Foreign homebuyers spend millions in Perth amid calls for surcharge rethink

Foreign buyers spent more than a quarter of a billion dollars on residential real estate in Western Australia in the first nine months of 2023.

Juwai IQI managing director Daniel Ho said according to its latest report Australia was the top destination for home buyers from mainland China, Hong Kong, Malaysia and Thailand according to a new report.

However, he said of $5.3 billion spent by foreign buyers on residential property across the country just 5 per cent, or $265 million, was in the west.

“Australia is the top choice for Asian investors,” he said.

“Canada and the United States remain popular, and south-east Asian markets like Vietnam, Indonesia, and the Philippines are also on regional buyers’ top-10 list.”

Ho said Australia was a top destination across multiple Asian countries and a focal point for Asian residential real estate investment due to its proximity, lifestyle, large immigration intake and educational opportunities.

“Most buyers are in fact, not outright, investors but purchasing for a combination of their own use and investment purposes,” he said.

“Relatively high purchasing and holding costs for non-residents make pure investment less attractive than in prior years.

“Australia’s large annual intake of overseas students and migrants helps create new demand for purchases but as the federal government limits foreign students with a goal of cutting net overseas migration, this could weaken.”

Strategic Property Group managing director Trent Fleskens said contrary to popular opinion, the 7 per cent foreign buyer surcharge imposed on foreign purchases of Australian property had a negative impact on the market.

“Firstly, it puts unnecessary and costly roadblocks in the way of genuine emigrants moving permanently to WA before they receive permanent residency,” he said.

“Secondly, it lacks the awareness that foreign buyers are a core financing route for apartment developers looking to reach pre-sale targets on apartment buildings we sorely need. There is a direct correlation between the introduction of the foreign buyer surcharge and the construction of new apartments in WA falling off a cliff – thousands of rentals we sorely need right now”.

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