Decline in new home sales eases
The fall in Melbourne property values further eased in April with positive…
27 November 2017
New government policies in both countries ease the demand for Australian real estate.
The past year has seen a decrease in the purchase of new properties for international investors; due to new fees in NSW for foreign buyers, and Chinese capital controls making it harder for Chinese nationals to move money outside of China.
In August this year, the Chinese government introduced new guidelines to restrict Chinese companies from trading overseas in certain sectors including real estate.
Housing affordability is a serious issue in Australia, with first homebuyers struggling to break into the market. Though these restrictions on foreign investors may not lessen the challenges that domestic buyers are facing, some say.
Foreign buyers purchase 10 to 15 percent of new construction – about five percent of total real estate sales. The Australian property market’s strength – which is partly based on foreign investment – has brought some foreign developers to Australia, boosting housing supply rather than reducing it. Other foreign investors contribute to rental stock by leasing their properties.
Chinese investors account for largest proportion of foreign real estate buying in Australia, and will continue to be a major player in the global real estate market; though with these tighter regulations, we will likely see spending slow.