Should We Be Wary of Foreign Investors?

Overseas buyers may elbow us out of the property race and we are likely to become a second-show in our own country. Has this statement got any truth in it? If it is true, it’s cause for serious concern and if it’s not, it is time the myth got busted. We better find out!

Why Australia is being favoured as a property investment destination?

High capital returns and stability have made Australia an overseas investment destination for sure. Add to this the fact that our country is being seen as a safe haven by many. It is also a place where people would love to educate their children. So all this “foreign buyer rush” is understandable. However, are they really forcing us, the Australian investors, out of the market? Can they be saddled with this blame?

Foreign buyers only get to eat the edge of the pie

As a first, it is worth noting that the foreign investors are restricted to buying either new or “under construction” properties. They cannot touch the established housing market and in being so restrained, they have no chance to enter a huge chunk of the Australian property market. To boot home the point, just go through this statistic- for the year 2012/13, the volume of purchase made by overseas buyers was only 6% of the total purchase volume.

In fact, Malaysia, Singapore and even UK and the USA showed more interest in our market in 2012 in comparison to 2013 and their investment activity has actually slumped.

Urban high density dwellings can be a concern

If there is a concern, it is the urban high density dwellings where new units may just be grabbed by the foreign investors big time. Because they have more to pay, developers will definitely get swayed towards them. It may be no surprise to see our local buyers being put off guard by hindrances like the Sunset clause more often from here on. If we can take stock of the situation in time and bring in the required regulations, the involvement of overseas buyers won’t be anything to grieve over.