Last week, the ANZ-Property Council Survey for the March quarter was released, which noted a rebounding of residential property sales to foreign (non-Australian resident) buyers, driven by NSW, QLD and SA:
As shown above, foreign buyers accounted for 21% of residential property sales nationally, with VIC (25%) and NSW (24%) most affected.
Now, NAB has released its Q4 Australian Residential Property Survey, which also revealed a strengthening of demand from foreign buyers:
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The latest NAB survey results suggest that foreign buyers increased their market share in both new and established housing markets for the first time since late-2015.
In Q4, foreign buyers accounted for 10.9% of all new property purchases (10.2% in Q3) – the highest level since Q1’16. In established housing markets, their share rose to 7.6% (6.4% in Q3) – the highest level since Q4 2015.
In new property markets, foreign buyers were noticeably more prevalent in VIC, where their market share of sales rose to 19.3% (15.0% in Q3). In WA, their market share grew to 9.3% (6.6% in Q4). Interestingly, the share of foreign buyers in WA has been climbing steadily since Q2’16, suggesting foreign buyers may be seeing greater value as local prices fall. Foreign buyer levels were however broadly unchanged in NSW at 8.1% (8.0% in Q3) and fell in QLD to 9.2% (10.5% in Q3) to its lowest level since mid-2014.
In established housing markets, the share of foreign buyers increased to 10.8% in VIC (8.5% in Q3) – its highest level in over a year – and 8.4% in NSW (7.2% in Q3). Foreign buyers were also a little more active in WA (5.4% vs. 5.2% in Q3), but were less prominent in QLD, where their market share fell to just 5.0% (5.7% in Q3) – the lowest since mid-2012.
Clearly, foreign buyers are continuing to have a significant inflationary impact on the established bubble markets of Victoria (10.8% share) and NSW (8.4% share).
NAB also should qualify what it means by foreign buyers of established property. These are clearly not all FIRB approved. So are we tracking illegals here?
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
