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The facts of foreign investment

On Jul 01 2015
Tagged as:
  • Residential Property


There has been much in the media of late surrounding foreign investment and the Australian ...

There has been much in the media of late surrounding foreign investment and the Australian Government’s efforts to stop illegitimate purchases.

In simple terms, the Government’s policy around foreign investment directs foreign purchasers toward newly constructed or off-the-plan dwellings, which serves to stimulate construction and jobs, and add more dwellings to an under-supplied marketplace.


The Government has made a suite of recommendations to tighten the process of foreign purchases, predominantly of established dwellings. The moves have been made to address public concerns about foreign buyers pushing up market prices.


But foreign buying needs to be put in perspective: it accounts for less than three per cent of existing property transactions nationally, according to the latest Foreign Investment Review Board statistics.


Some would argue that Australia needs foreign investment in order to stimulate the economy. Strong foreign property investment is helping developers to build new residential developments which is easing the shortage of dwellings in capital cities such as Sydney.


It is suggested that Australia is 120,000 dwellings short of what is needed for sustainable accommodation, with the bulk of the shortfall in Sydney.


Overseas buyers are comfortable purchasing off the plan, probably more so than Australians.


Most developments need about 75 per cent of properties sold prior to commencing construction. Where new developments are being built in Sydney and other capital cities, the flow on-benefits include the rejuvenation of suburbs with cafes, medical centres and retail shopping opportunities.

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