Chinese lead foreign property investment

Foreign-investment-in-the-residential-property-sector-increased-by-19-per-cent-in-the-last-financial-year_157_62317_0_14099346_100Chinese citizens are leading foreign investment in the Australian property market, according to the Foreign Investment Review Board (FIRB).

The FIRB noted that Chinese buying was the biggest source of foreign investment in the sector in the 2012-2013 financial year.

This finding may be of interest to buyers and local investors in the Sydney region facing increasing competition when it comes to locking down property.

Increased demand also affects homeowners, who may be able to secure more favourable selling prices.

Big spenders

A significant $5.9 billion worth of property purchases in Australia originated from China in the 2012-2013 financial year.

This marks a 44 per cent increase from the previous year and puts Chinese buying activity ahead of foreign investment by American and Canadian buyers.

The hike in Chinese interest could have implications for both owners and buyers of residential and investment property as well as continuing to fuel already booming property markets, such as Sydney.

Canadian investment came to $4.9 billion and US investment totalled $4.4 billion during this time period.

While the increasing interest from China is noteworthy, it’s also worth considering foreign investment from a broader perspective, with these three countries alone representing a combined $15.2 billion worth of buying activity across Australia.

However, a cautious approach may be necessary given other figures from the FIRB.

Total foreign investment in Australia dipped in the 2012-2013 year, although the figures are still high. From real estate to mining, overseas individuals and entities invested $135.7 billion in Australia.

However, foreign investment in the residential property sector surged, indicating that this industry will remain a drawcard for overseas buyers.

The FIRB approved 11,668 Australian residential dwelling purchases by foreigners in the most recent financial year, highlighting a 19 per cent increase on the year prior, according to Property Observer.

NSW was the second-most popular state for these approvals.

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