Asian Investors Surge in Australian Real Estate, with a Keen Eye on Melbourne and the Gold Coast

The Australian property market has witnessed a significant upturn in interest from overseas investors, particularly from Asian countries, as per recent reports and data analyses. Amidst rising migration and China’s post-pandemic economic reactivation, international real estate agents have observed a staggering 400 percent increase in property inquiries, with Chinese nationals leading the charge.

According to an article by Tom McIlroy, government data have indicated a 40 percent increase in approvals for overseas buyers in markets such as Sydney, Melbourne, and Brisbane when compared with the previous year. These statistics align with the National Australia Bank’s (NAB) residential property survey findings that suggest a continued rise in foreign purchases, now at a five-and-a-half-year high.

Eliza Owen, CoreLogic’s head of residential research, provided some optimism for Australian home buyers amidst this foreign investment surge. “Once you have rising foreign investor interest, it tends to generate more supply as well. So, theoretically, in an unconstrained supply environment, it shouldn’t have too much impact on price,” she stated, mitigating concerns over potential price hikes due to the investment influx.

Adding to this perspective, Peter Li from Plus Agency highlighted the significant growth in buyer inquiries, which are up fourfold from the previous year, stating that “Hong Kong-based buyers are No.1, followed by the mainlanders, and then Taiwanese.”

The influx of investment also correlates with China’s easing of pandemic restrictions, as Li noted, “the Chinese government has removed the requirement for a COVID test when you fly.” He further emphasized that the demographic driving this trend comprises individuals aged between 35 to 45, seeking substantial properties to reside in over the next decade.

On the other hand, Rhys Tarling reported on the most sought-after locations by overseas property seekers, with Melbourne taking the lead, according to PropTrack’s Overseas Search Report – October 2023. Karen Dellow from PropTrack elaborated that buy and rent searches have surged, surpassing pre-pandemic levels, largely influenced by the return of students and migrant workers to the country.

Moreover, the Gold Coast has also seen high demand among overseas and interstate migrants, proving the diversification of interest across Australian locations. Dellow explained the interrelation between rental market searches and immigration trends, highlighting, “Rental searches in particular are a leading indicator of overseas migration.”

The resurgence of interest from China comes after a significant downturn during the pandemic, with search volumes for purchases and rentals now doubling from pre-pandemic levels, signifying renewed confidence in the Australian market.

While Australia grapples with housing affordability and market crises, the robust return of foreign investment and interest signals a dynamic shift. Observers like Daniel Ho of Juwai IQI have noted that Chinese buyers are now in “catch-up mode” after the disruptions caused by the pandemic, moving from pure investment to purchasing family homes.

As the Australian government navigates this renewed international attention towards its property market, the impact on local buyers, market stability, and the broader economy will be key factors to watch in the coming months.

References:

McIlroy, T. (Date not specified). “China leading Asian investor surge in Australian property.” https://www.afr.com/politics/federal/china-leading-asian-investor-surge-in-australian-property-20231101-p5egmx 

Tarling, R. (Date not specified). “Australian property market’s most searched for locations from overseas property seekers.” https://thepropertytribune.com.au/market-insights/australian-property-markets-most-searched-for-locations-from-overseas-property-seekers/