The ANZ-Property Council Survey for the December quarter has been released, which notes a clear cooling of residential property sales to foreign (non-Australian resident) buyers, consistent with tighter lending standards:
While the current environment and outlook for Australian property remains positive, survey results suggest a falling share of property sales to foreign buyers, especially in the residential sector. The reduction in total housing sales to foreign buyers to 21% from 24% last quarter possibly reflects tightening borrowing conditions across the industry. Some lenders have exited the foreign investor segment of the housing market, while some are requiring larger deposits or reducing the amount of overseas income when calculating the ability to service a loan. As a result, survey respondents expect that the availability of debt finance will remain tight in the residential property space. Nonetheless, a solid domestic economy and expectations of still-attractive price growth suggest that foreign buyers will continue to maintain a sizeable presence in the Australian property market.
As shown above, the percentage of sales to foreign buyers has fallen everywhere, except WA, but remains at particularly high levels in VIC and NSW. Around 26% of residential property sales are reportedly to foreign buyers in VIC, whereas around 23% of sales are to foreign buyers in NSW.
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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.
