The impact of international buyers on ever-increasing property prices in Canberra and across much of Australia might be much smaller than widely believed, according to local real estate experts.
A recent survey conducted in June 2021 by the University of Technology in Sydney found 82 per cent of Australians believe “foreign buyers from China drive up Australian housing prices” and 69 per cent believe “Chinese investors in Australian real estate have made it difficult for first home buyers in Australia to enter the market”.
With a recession and international migration to Australia halting in 2020 due to the global pandemic, projections indicated housing developers would see a drop in building developments, but it turns out that wasn’t the case.
The ABS measured by the end of 2020 that new home approvals across the country were at their highest level since 1999.
The REA Insight Property Outlook Report for 2020-2021 recorded more interest in overseas buyers looking to purchase Australian properties, likely driven by political and economic uncertainty, and skyrocketing Covid-19 cases in other countries.
From December 2019 to December 2020, the biggest increase in Australian property searches came from the US, accounting for 57 per cent of total searches, followed by Hong Kong (17 per cent), Singapore (15 per cent), the UK (10 per cent), and New Zealand (three per cent).
Any assumption the Australian housing market is in crisis due to Chinese investors isn’t backed up by statistics, which indicate interest from China in Australian property has continued to fall, dropping by 39 per cent over the past year.
The country that makes up the majority of overseas investors in Australia is the US, closely followed by European countries.
Director at Colliers International in Canberra, Josh Reid, said he believes the housing crisis in the ACT can’t be blamed on international buyers.
“There’s always a general perception that’s what’s happening but being in an international company with some Australian offices, Sydney and Melbourne see more international buyers in their market then we do. Traditionally for us, ANU and UC were big international drivers because of international students attending the unis, but since COVID that market has changed significantly,” Mr Reid said.
“There’s always been far more buyers in the Canberra market then there’s been demand and certainly the supply shortage and affordability are pushing people back into apartments because land is just unachievable and unaffordable.”
Traditionally, the majority of new buyers from overseas have a heavy preference for land, he said. And while interstate and international buyers are starting to lean more towards Canberra because of its strong market, they only make up around five per cent of buyers in the ACT.
“Canberra’s finally getting the airtime it deserves. It’s got strong fundamentals and we’ve seen significant growth over a period of time with a generally stable market, so there’s confidence in buying here,” he said.
“The majority of our workforce is government employed, earning a good income, and it certainly helps that it’s a liveable city.”
CEO of Real Estate Institute of the ACT, Michelle Tynan, agreed that international buyers are not having an impact on Canberra’s housing market.
“The agents I speak to say there’s not an impact at all. We did have some expats last year returning, not a great deal of numbers, but some from Europe and that type of thing,” Ms Tynan said.
“This time around, I think one of the agents said that it’s actually Canberrans buying and upgrading their homes, and with assets increased and with prices upgrading, they feel that it’s more Canberrans buying Canberra property that’s making the market so hot.”
A spokesperson for a high-profile local property developer said just under five per cent of their sales this year have required Foreign Investment Review Board approval, so there hasn’t been a significant impact on the market.
They said most of their buyers are from Canberra, Sydney or regional areas.
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