Foreign investors pulling out of the Australian property market

The Australian Prudential Regulation Authority (APRA) is a statutory authority of the Australian Government and the prudential regulator of the Australian financial services industry. To cool off the Sydney and Melbourne property markets after prices have been increasing for the better part of the last decade, many changes to certain finance policy have been implemented by APRA since late 2016.

These changes are calculated, strategic and target certain outcomes that have had numerous impacts on different property markets all across Australia in the last 12 months.

 

For instance; If we look at foreign investment into the Australian property market and the impact it has had at the peak of the NSW and VIC property cycle and take a look at today’s current conditions, some key statistics are revealed;

 

1 in 5 purchases of new property were from a foreign buyer at the peak of NSW property cycle in 2015/16.

 

As of 2017, 1 in 20 purchases of new property were from a foreign buyer in NSW according to NAB's latest Residential Property Survey.

 

Further south in the Victorian property market at the peak of the property cycle, 1 in 3 purchases of new property were from a foreign buyer. Today’s numbers show 1 in 7 purchases of new property were from a foreign buyer.

 

In the current property market, nationally the share of foreign buyers of new homes has dropped to a 6-year low.

 

In contrast the numbers revealed from 2014 through 2017 have owner-occupiers recording the highest number of sales for new property, making up 59.5% in total.

 

Based on the data from NAB's latest Residential Property Survey, foreign investment is falling and owner-occupier purchases are increasing. The question for us investors, is this a good or bad thing?

 

For more data and information surrounding today’s Australian property market and the latest trends, click on this link for this week’s episode of “Coffee and Property”

 

This week’s episode will cover the above article in detail but will also look into:

  • Why a property crash remains unlikely in Australian markets

  • Rising interstate migration good for QLD property market

  • Market trends for 2018

 

 

 

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