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One in six new properties sold to foreigners

Foreign-buyer demand for new properties increased during the third quarter, while demand for existing homes also edged higher.

The NAB Residential Property Survey (Q3 2014) found that foreign buyers accounted for 16.8 per cent of total demand for new developments.

NAB expects demand to increase further next year to 17.3 per cent.

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Foreign buyers were more active in all states, especially Victoria where they accounted for an estimated 24.8 per cent of demand.

In contrast, local investors were less active in Q3, with their share of national demand falling to 27 per cent from 32.5 per cent in Q2.

The report found local investors accounted for a smaller share of demand in all states.

Released yesterday, the NAB survey found foreign buyers were slightly more active in established property markets in Q3, with their share of total national demand rising to 8.2 per cent from 7.2 per cent in Q2.

Foreign buyer demand for established property increased in all states except NSW.

Victoria led the way, with foreigners accounting for a record high 11.5 per cent of established property demand.

Ausin Group, an Australian financial services company that provides property services, immigration support and mortgages, expects to double its volume of home loans to overseas buyers next year.

“In the last year we have written about $250 million in loans,” Ausin Group chief executive Joseph Zaja told Mortgage Business.

“Next calendar year we are on track to write $500 million,” Mr Zaja explained.

Approximately 70 per cent of all loans written through the group are for mainland Chinese investors, while the rest are for owner-occupiers who have gained permanent residency.

Apartment sales are popular with investors, while house and land packages are preferred by owner-occupiers, Mr Zaja said, adding that LVRs are typically much lower for overseas buyers than local investors.

One in six new properties sold to foreigners
mortgagebusiness

 

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