Illegal Chinese property bid eases in Q1

From the Q1 NAB property survey it’s quite clear that the illegal Chinese property bid continues if diminished:

The latest NAB survey suggests that the proportion of foreign buyers in Australian housing markets was broadly unchanged in both new and established property markets in Q1’17. Foreign buyers accounted for an estimated 10.8% of all new property sales nationally (10.9% in Q4’16) and 7.2% of all established property sales (7.6% in Q4’16).

In new property markets, however, foreign buyers were noticeably less prevalent in VIC, where their market share of total sales fell to an estimated 13.8% (19.3% in Q4’16). Foreign buyers were also less influential in WA, where their market share fell to an estimated 5.6% (9.3% in Q4’16). In contrast, foreign buyers played a bigger role in new property markets in NSW, with their share of total sales rising to an estimated 11.6% in Q1’17 (8.1% in the previous quarter). Foreign buyers were also more active in QLD (12.9% vs. 9.2%).

In established housing markets, the overall share of foreign buyers fell to 7.4% in VIC (10.8% in Q4’16) and to 8.0% in NSW (8.4% in the previous quarter). Foreign buyers were however a little more active in WA (7.0% vs. 5.4%) and QLD (6.1% vs. 5.0%).

Around 53% of all property purchases made by foreign buyers in Q1’17 were for apartments, 30% houses and 17% dwellings or land for redevelopment. But these ratios vary a lot by state.

In VIC and WA, around 45% of all properties purchased by foreign buyers in Q1’17 were apartments, compared to around 63% in NSW and 50% in QLD. In contrast, around 36% of foreign purchases in WA and 32% in QLD were houses, compared to just 26% in NSW and 30% in VIC. Almost 1 in 4 (24%) properties purchased by foreign buyers in VIC were dwellings or land for re-development, compared to just 11% in NSW, 18% in QLD and 19% in WA.

PRICES PAID BY FOREINGERS

By price, 1 in 4 (25%) apartments bought by foreigners cost less than $500,000, and 45% between $500,000-$1 million. Around 18% were worth $1-2 million, 8% worth $2-5 million and almost 5% over $5 million. By state, around 44% of apartments sold in QLD were under $500,000, compared to just 15% in NSW and 21% in VIC. Sales in the $500,000-$1 million range varied from 49% in NSW t0 41% in QLD and WA. In the $1-2 million range, NSW dominated (23.1%), but VIC led the way when it came to apartments worth more than $5 million (6%).

When it came to houses, just 16% foreign sales were for properties of $500,000 or less, 40% between $500,000-$1 million, 25% for $1-2 million, 14% for $2- 5 million and 6% over $5 million. By state, almost 30% of sales in QLD and WA were for houses less than $500,000, compared to 7-8% in VIC and NSW where stock in this price point is more limited (particularly in Sydney and Melbourne). Around 32% of house purchases in VIC were in the $500,000-$1 million range, compared to 36% in WA, 44% in NSW and 47% in QLD. In the $1-2 million price range, foreign buyers were most active in NSW (30%) and least active in QLD (16%). When it came to prestige houses, 24% of sales in VIC were worth $2-5 million and 8% over $5mn. In NSW, the share of sales at these price points was lower – 13% in $2-5 million range and 5% over $5 million.