Foreign house purchases jump 19pc: FIRB
May 11, 2016 Australian Financial review: <Citylife note, the bold highlights is ours:
Foreign investment in Australian houses surged 19 per cent last year with Chinese accounting for well over half of the total.
Foreigners were allowed to buy $72.4 billion of residential property in 2015-16 compared to $60 billion previously and the number of approvals surged 9 per cent to 40,100, according to the Foreign Investment Review Board's 2015-16 annual report.
The numbers will fuel a debate about the role foreign purchasers play in surging house prices especially in the overheated Melbourne and Sydney markets. Foreigners, who include individuals here on a temporary visa, applied to buy $20 billion of residential property in NSW, $28 billion in Victoria and $17 billion in Queensland.
The FIRB report does not say how many of the foreigners who bought property were from China but it is clear they are the vast majority from an analysis of the total figure for all foreign investments, which includes residential property but also commercial property, farms, industrial and so on.
Citylife Note: WOW! You must by now be thinking foreigner buyers must account for nearly all property buyers!
Let's keep reading for a moment:
Foreigners bought a total of about 43,000 Australian assets in 2015-16, about 40,000 for residential property and the rest for the other sorts of assets.
THERE IS THE KEY POINT, HIDDEN QUITE FAR INTO THE ARTICLE: "40,000 FOR RESIDENTIAL PROPERTY"
According the Australian Bureau of statistics: There are approximately 9,700,000 dwellings in Australia, And according to RP Data Core logic, “Over the 12 months to March 2017 there were 456,840 sales across the combined capital cities. “ Therefore it can clearly be seen that Foreign buyers (at 40,000 sales) make up UNDER 10% of all the sales made in the capital cities.
So, our conclusion is- in spite of media reports- foreign buyers make up a tiny proportion of residential purchases in Australia.
FOR RESELLING ONLY TO AUSTRALIANS: If you had the choice of reselling to Foreigners, you have just 8.8% of the market, but by selling to Australians you have around 91% of the market. In a perfect world of course, you would be able to sell to both foreigners AND Australians, however, it is well known foreign buyers prefer NEW properties, so would be unlikely to buy the old ones anyway.
NEW FOREIGN INVESTOR LAWS IN PLACE