FOREIGN buyers were given approval to splash $28 billion on residential real estate in Victoria in the previous financial year — equating to almost a third of the value of all property sales in the state.
Real Estate Institute of Victoria figures indicate $100.4 billion was spent on Victorian residential property in 2015-16.
The Foreign Investment Review Board’s latest annual report reveals Victoria remained the state of choice for offshore buyers that year, with more than 17,500 applications to buy new and existing homes, vacant land and properties for development given the green light.
This was up on the previous two financial years — 16,587 applications worth $25 billion were approved in 2014-15, and 9979 worth $14 billion in 2013-14.
It also reveals foreigners were authorised to splash $72.4 billion on residential real estate nationwide in 2015-16, with NSW ($20.7 billion) and Queensland ($16.9 billion) the next most popular states after Victoria.
Chinese were the largest buyers of residential and commercial property in Australia for the third year in a row, allowed to spend $31.9 billion — up from $24.4 billion.
This was more than triple the contribution from US buyers, who had the second biggest appetite for Aussie property.
Charles Pittar, chief executive of Chinese international property website Juwai.com, said Chinese investment had been “a godsend for Australia”.
“Every Chinese dollar invested landed in the pocket of an Australian somewhere — Chinese investment translates directly into jobs, tax revenue, economic growth and new housing construction,” he said.
Juwai.com figures, based on inquiries made by the site’s two million monthly users, show Melbourne remains the Australian city most sought by Chinese buyers this year.
Mr Pittar said they got “better value” in Melbourne than Sydney, and were also attracted to the Victorian capital’s schools and universities, solid job market, safety and livability.
Further realestate.com.au data shows Point Cook has been most searched Australian suburb by China-based househunters this year, with Glen Waverley coming in third and Box Hill, fifth.
Hocking Stuart Point Cook director Scott Perry said foreign investment kept his suburb’s property market “buoyant”, with Chinese, Indian and British buyers leading the way.
Chinese buyers largely sought vacant blocks to land bank or build “big McMansions” on, and were willing to “pay a premium”, he said: “They’re not sniffing around the established homes, so they’re staying affordable for the everyday Aussie.”
The FIRB report shows foreigners were authorised to spend $4.4 billion on existing Victorian homes in 2015-16, about $1 billion less than the year before. This included $1.1 billion on dwellings intended to be demolished and redeveloped.
Approvals for new dwellings and vacant land purchases were up — “consistent with the Government’s policy to channel foreign investment in residential real estate into investment that increases the housing stock,” the report said.
APPROVED FOREIGN PROPERTY INVESTMENT IN VICTORIA 2015-16
New dwellings: 10,281 worth $6.87 billion
Existing property: 2499 worth $3.34 billion
Redevelopment: 564 worth $1.1 billion
Vacant land: 4109 worth $1.47 billion
Developer (including new dwelling exemption certificate approvals): 72 worth $15.28 billion
Total: 17,525 approvals worth $28.06 billion
TOP FOREIGN BUYERS OF AUSTRALIAN PROPERTY 2015-16
*Residential and commercial
China: $31.912 billion
US: $8.206 billion
Singapore: $4.56 billion
United Arab Emirates: $3.597 billion
Canada: $3.18 billion
• Foreigners generally need to gain government approval before purchasing residential land in Australia
• The government’s policy is to channel foreign investment into new dwellings and vacant land, as this “creates jobs in the construction industry and helps support economic growth”
• Non-resident foreigners are therefore generally prohibited from buying established homes, but temporary residents can apply to purchase one established dwelling to live in while residing in Australia
Source: Foreign Investment Review Board annual report 2015-16 Hero Image: Mark Stewart