The boom in Australian real estate sales to foreign investors has run its course, with NAB’s latest survey results continuing to highlight a decline in foreign buying activity resulting from policy changes in China on foreign investment outflows and tighter restrictions on foreign property buyers in Australia. In Q3, there were fewer foreign buyers in the market for Australian property, with their market share falling to a 7-year low of 8.1% in new housing markets and a survey low 4.1% in established housing markets.
The share of sales to foreign buyers fell in all states except VIC where their share rose to 13.0% (11.7% in Q2), but still well below the record highs approaching 33% in late-2014. The share of foreign buyers in NSW was unchanged at 7.5% but also well down from a high of 21.0% in Q1 2015. The share of foreign buyers in QLD also fell to 6.2%, down from 22.8% in Q2, to its lowest level since mid-2014. A similar trend is evident in established markets with the shares of sales to foreign buyers falling in all states. Property professionals in VIC reported the highest share of buyers in established housing markets at 5.5%, followed by NSW (4.5%), WA (3.7% and QLD (3.7%). Moreover, the share of foreign buyers has well fallen below survey average levels in all states.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
