NAB has today released its June quarter Australian Residential Property Survey, which revealed that foreign buyers increased their share of existing home sales to around 10% nationally, with foreigners accounting for particularly large shares in Victoria and New South Wales:
Despite much stricter restrictions on foreign investment in the established residential property market, our survey suggests foreign buyers also play a fairly significant role in this part of the market. According to surveyed property professionals, foreign buyers accounted for 11.4% of all established apartment sales and 9.4% of house sales in Q2. More foreign buyers were attracted to established apartment markets in all states, led by VIC (17.5%) & NSW (12.6%). Foreign buyers also had a much bigger presence in the established housing market in VIC, with a 16.1% share of total demand in this market in Q2. This was significantly higher than in NSW (10.2%), WA (5.8%) & QLD (5.3%)…
In the new property market, property professionals estimated that foreign buyers accounted for 16.1% of all apartment sales and 11.5% of house sales in Q2. There were, however, big differences between the states, especially in the apartment market where foreign buyers purchased more than 28% of all new properties in VIC, compared to 16.5% in NSW, 13.1% in QLD & 12.9% in WA. There was much less divergence in new housing markets, although foreign buyers were again most active in VIC (16.7%), ahead of NSW (14.6%), QLD (8.7%) & WA (8.3%).
One wonders how long this farce can continue. For the most part, Australia’s foreign investment rules exclude non-residents from purchasing existing dwellings. And yet, overseas buyers continue to make up a large share of sales, especially in the key bubble markets of Sydney and Melbourne (coincidence?).
The Paris-based Financial Action Task Force (FATF) on money laundering has already warned that Australian residential property is a haven for international money laundering, particularly from China. As has the Australian Transaction Reports and Analysis Centre (AUSTRAC), which warned that “laundering of illicit funds through real estate is an established money laundering method in Australia”.
Viewed in this light, it beggars belief that Australia’s governments can launch thousands of prosecutions and fines against unauthorised Uber-X drivers, whilst effectively turning a blind eye to the many illegal sales of existing homes to non-residents.
With the Government’s enhanced rules on foreign investment scheduled to come into effect in November, all we can do is hope that the threat of prosecutions and penalties puts an end to existing homes being willingly sold-off to foreigners, at the expense of our young.