The latest residential property survey from the National Australia Bank (NAB) has shown that the number of homes being sold to foreign investors in the country has increased for the first time since 2015.
The maximum upsurge was seen in the Victorian and New South Wales (NSW) markets which are said to be the most affordable in an overall heated housing market.
In a statement, NAB said,
Foreign buyers accounted for 10.9 percent of all new property purchases (10.2 percent in Q3) — the highest level since Q1 2016. In established housing markets, their share rose to 7.6 percent (6.4 percent in Q3) — the highest level since Q4 2015.
In the new housing segment, foreign buyers were more active in Victoria with their share rising to 19.3 percent from the 15 percent seen in the third quarter of 2016. On the other hand in Western Australia, 9.3 percent of new properties sold were to foreign investors while in Queensland it was 9.2 percent.
The country’s most expensive housing market is NSW which saw only 8.1 percent of new housing being sold to foreign buyers as compared to the previous quarter sale of 8 percent.
Current levels are far from the 20 percent-plus levels recorded in 2015 for the market. In terms of the house types, of all properties sold, 55 percent were apartments while 30 percent were houses, the rest were land development.
In Victoria, apartments comprised 47 percent while in New South Wales and Queensland it was 59 percent. For Western Australia it was at 52 percent and 33 percent of foreign purchases were houses while in Victoria it was 32 percent. New South Wales and Queensland were at 27 percent and 31 percent respectively.
When looking at the value of the houses being purchased, the NAB report said that approximately 30 percent properties purchased by foreigners were below the value of $A500,000, while 45 percent were at $A500,000-$1 million. In the premium segment , nearly 16 percent sales were apartments worth $A1-2 million,7 percent were for properties valued at $A1 – 2 million and 3 percent for apartments higher than $A5 million.
The majority of the apartments bought by foreign buyers were below the $A1 million threshold a segment popular with domestic first-time home buyers as well. This rise in foreign buyers along with the existing sharp growth in domestic housing activity is likely to reignite the debate surrounding the heating up of Australia’s housing market.