Real Estate Marketing & Beyond
According to a report in AFRWeekend, Chinese investors spent an incredible $12.4 billion on real estate during the last financial year, making China Australia’s biggest source of approved foreign investment.
Apparently Chinese investors planned to spend $27.7 billion in Australia, according to the Foreign Investment Review Board annual report. This is much higher than investors from the United States who received approval to spend $17.5 billion. Real estate investments accounted for nearly half of the total spend by Chinese investors as the $12.4 billion that received approval was more than twice the amount spent by US investors on real estate in Australia. The government has responded by proposing tough new rules on foreign investment into residential real estate and recently ordered a Chinese buyer to sell a $40 million mansion that had been purchased illegally.
Businesswoman confident outside. Business woman standing proud and successful in suit cross-armed.
It is important to note that the figures from the Foreign Investment Review Board show approved investment rather than actual investment and that the figures for US investors could be higher. This is due to the higher threshold that currently exists for investors from the US compared with investors from China under existing trade rules. Even though China may have been top of the list for annual approvals, the US, the UK and Japan still have a greater investment in Australia than China.
The recently released statistics don’t give a breakdown country by country but do show that the number and value of property transactions nearly doubled. The previous year the number of transactions was 11,668, but for the year 2013 to 2014 it reached 23,054.
Overall the value of proposed investment into residential property increased from $17.2 billion to $34.7 billion. Investment into new homes increased to $25.8 billion, up an amazing 200%. Existing homes can only legally be bought by temporary residence in Australia and this figure was up by 32% to reach $7 billion. In addition, investment into commercial property was also up, from $34.8 billion to $39.9 billion.
The Australian government has nearly finalized the proposed new fees for foreign investors buying real estate in the country. Under these new rules foreign investors will be subject to a $5,000 application fee for property costing less than $1 million. This figure would increase by $10,000 for every additional $1 million on the purchase price. A register will help track the origin of foreign investment into residential and agricultural real estate. If foreigners are found to be breaching the rules they will be fined up to 25% of the value of the property and forced to sell.
