Foreign buyers shun Australian property

According to NAB, foreign buyers continue to shun Australian property, with demand still well below decade lows in the June quarter:

While the prominent role played by foreigners in Australian housing markets has dissipated in recent years, market share in this buyer group in Q2 increased in both new and established housing markets. In new property markets, their overall market share increased to a 2-year high 8.3% (6.6% in Q1) and to 3.1% in established housing markets (from a survey low 2.4% in Q1). But buying activity is still below survey average levels in both markets.

In new property markets, the share of sales to foreign buyers jumped noticeably in VIC to an above average 19.3% (12.4%) and has continued the rising trend seen in the past 3 surveys. Market share of foreign buyers in new property markets fell in all other states. It fell to 2.5% in NSW (4.6% in Q1; average 9.1%), 6.4% in QLD (9.7% in Q1; average 12.0%) and 1.7% in WA (4.0% in Q1; average 6.3%).

In established housing markets, foreign buyers accounted for a larger share of sales in VIC (4.8% vs. 2.3% in Q1), NSW (3.4% vs. 2.8% in Q1) and QLD (2.3% vs. 1.6% in Q1), but a smaller share in WA (2.2% vs. 3.8% in Q1). The share of foreign buyers however remains below survey average levels in all states.

With borders likely to remain closed until next year, and Australia and China locked in a cold war, it’s hard to see foreign demand rebounding to former levels anytime soon.