13 Jan Cashed-up foreign buyers still seek Australian property, but are they really to blame for price rises?
Jeremy Tran usually sells properties to foreign buyers, but has pivoted towards first-home buyers during the pandemic.(Supplied: Jeremy Tran)
While COVID border closures hamper Australian property sales to international buyers, many Australians still struggle to break into the market because of rising house prices.
Is this proof that overseas buyers are not to blame for the inflated dwelling costs in Australia?
It might come as a surprise to some, but the Foreign Investment Review Board’s latest survey shows that overseas buyers’ purchasing activity has hit record lows, with residential real estate approvals for foreigners falling from 40,141 in 2015-16 to 7,056 this year.
And CoreLogic’s research director Tim Lawless says foreign buyers have comprised a consistently smaller portion of residential housing demand in Australia over the past five or six years.
However, for some domestic buyers seeking a home in Australia is still not smooth sailing, with agents blatantly preferring foreign money.
Cam My Tran-Smith and her husband recently bought their first home in the Greater Sydney suburb of Peakhurst, but they missed out on so many properties that they “lost count.”
The couple inspected three to five properties every Saturday for a year before they made their purchase.
“We felt exhausted and wanted to give up at times because prices were bizarre.”
The latest statistics from CoreLogic show dwelling values in Australia have risen 20.3 per cent over the past 12 months — the highest annual appreciation since June 1989.
Cam My Tran-Smith says some real estate agents neglected her family in favour of overseas buyers. (Supplied: Cam My Tran-Smith)
Are international buyers taking over?
Despite the relief of having ended their house hunt, the Tran-Smiths said some house inspections were bad experiences.
“A real estate agent gave us a cold shoulder at a property viewing in Hurstville but treated foreign families with a completely different attitude,” Mrs Tran-Smith said.
“The agent was very enthusiastic and said to them: ‘Welcome to your new home.’
Ngoc D, who migrated from Vietnam 15 years ago, said that at first real estate agents were highly enthusiastic during house inspections.
“Some real estate agents thought we were Chinese and were chasing us like hounds at first,” Mr Ngoc D said.
“The enthusiasm gradually cooled down though once they found out we are from here.
Why are Aussie properties so attractive?
Mr Tran, who has more than 10 years experience in dealing with international buyers, says owning Australian property gives his clientele a sense of “certainty and security”.
“Because of its stable economy and legal system, Australia is such a safe haven for preserving wealth and comprehensive protection for property owners from all over the world.
“Our policies are favourable for overseas buyers who want to invest in Australian properties, while the purchasing procedures are simple and easy.”
The salesman highlights that Australia’s geographical location is another reason why his clients are drawn to the nation’s property market.
“We are the closest developed country to Asia, where the majority of wealthy investors are — mainland China, Hong Kong, Singapore, Indonesia and Vietnam,” he said.
Foreign demand eases, but prices still rising
Mr Tran says his overseas clients’ interest in Australian property has remained strong during the pandemic, but many are still waiting for border re-openings to close deals.
He said he had to pivot his target demographic towards first-home buyers over the past two years.
“Many first-home buyers are migrants who recently acquired their PR [permanent residency], and they are highly motivated by their new access to the government’s support packages and benefits for first-home buyers.”