Foreign property buyers exit Australia

NAB’s Q1 2021 survey of residential property professionals, released today, reveals that the share of Australian homes sold to foreign buyers has fallen to its lowest level since records began in 2010, at only 3.7% of new home sales and 2.2% of established home sales:

Foreign purchases of Australian real estate

The share of new and established homes sold to foreign buyers has hit its lowest level on record.

At the state level, Victoria bucked the trend across the new home market, with sales jumping to 3.5%. The other major capitals experienced falling new home sales to foreign buyers:

New property sales to foreign buyers

Victoria recorded rising new home sales to foreign buyers in Q1 2021, whereas the other major markets recorded falls.

The opposite was true across the established market, with sales to foreigners slumping to only 1.8% in Victoria and 1.1% in Queensland, whereas New South Wales was broadly unchanged at 3.1% and Western Australia (3.3%) recording an increase:

Established sales to foreign buyers

Sales of established homes to foreign buyers hit rock bottom in Queensland and Victoria in Q1 2021.

This could be the bottom, however, with the net number of property professionals expecting the proportion of foreign buyers in the established market to increase outweighing those who expect it to fall (+2%):

Expected share of property buyers

A small majority of property professionals expect an increase in foreign buyers in the period ahead.

Regardless, the booming foreign demand witnessed 5-6 years ago is a distant memory and is unlikely to be repeated anytime soon.

The closed international border and deteriorating relationship with China should continue to suppress foreign buyer demand.

Unconventional Economist

Comments

    • and who are the next buyers once all these mugs are done buying ?
      We are not in a boom, it’s a ridiculous bubble driven by propaganda lies & fake low interest rates

      I always say why aren’t people calling this the bubble it is. I shouldn’t be surprised, all the Johnny come lately’s’ will be sprouting they knew it was a bubble, after the fact…..

      Just wait until the blame game starts……I can just see it already……Gov will be dragging in RBA, Bank CEO’s, I can just picture the parliament enquiry’s next year……

      Let’s just note down for the records…..I haven’t heard any….maybe only a handful saying we are in a bubble

      • So, 3.7 new properties and 2.2 existing properties. @UE – Show us the total % of assets still owned by foreigners as looking at yearly numbers doesn’t tell us much.

        @BCN – Its a bubble for sure and has all the traits. FOMO, greed, leverage, risk taking, worn down apathy, reluctant acceptance. Its been a bubble for years when you look at all the ratio’s and the foreign buyers with laundered money have a healthy nest egg of Australian assets on the balance sheet meaning less for locals and higher prices.

        The challenge – When your economy is houses and holes, what else will folks do with their money with borders shut?

        • the foreign buyers with laundered money have a healthy nest egg of Australian assets….relative has house in Bentleigh..neighbouring house forrain owned..students through uni now living last 8 years in USA. Parents used to visit Australia every 2 years..no one been there since Jan 2016…probably valued 850k – million plus…also fully furnished including tools in shed for gardener…thieves had field day over 2 weekends, totally trashed, doors caved in, emptied unwanted stuff on nature strip, cops relatively indifferent….thieves xame back 2nd weekend & emptied tool shed.

    • “So…why is the property market so hot then?”

      It is obvious it was hindered by foreign buyers as apparently Aussies on their own can support RE prices much better when competing only internally.

      Chances are therefore the prices of RE will go down with foreigners flooding by the end of year
      /sarc

  1. I’m guessing it’s too much to hope that Aussie specfestors will be left holding the bag.

  2. Shouldn’t foreign buyers’ share of demand for established properties be zero? … since forever?

  3. Lots of Foreign Buyer’s parents following newly minted Aussies around on inspections. Just saying.

  4. kiwikarynMEMBER

    “Regardless, the booming foreign demand witnessed 5-6 years ago is a distant memory and is unlikely to be repeated anytime soon”
    Dont bet on it. One symptom of NZ’s red hot property market is the resurgence of the Asian buyer, who is bidding at auction like its still 2016, and paying stupid amounts over the value of the property in order to win it. I’ve lost two properties to bidding wars between two Asian buyers that left the rest of the bidders in the room in the dust. No doubt the same thing will start to happen in Australia. NZ didnt get a 30% increase in prices in a year from NZ FHB bidding with money they don’t have. Its got there because somehow Asian money is coming back in.

  5. “Foreign buyers”, but in reality any buyer not born in Australia, and without Australian born parents is foreign in reality (even if not so in a legal sense), what would be the percentage under that metric?

    Far too high.

  6. David WilsonMEMBER

    It’s great to see foreign buyers out of the market, they should be banned to give younger Australians the opportunity to get into property ownership.
    I would like to see values drop 10-15% at least.