Chinese investors are now the biggest investors in Australian property, spending over $24 billion in 2014-15, a figure that is a lot higher than that of US investors.
The intended investment from China during 2013-14 was £12.4 billion but that year, spending exceeded that of the US for the first time, making China the top investor.
Around 50% of investment that had been approved by the FIRB during 2014-15 was for property and this totaled $97 billion. This was followed by investors from the US who had applications agreed by the FIRB to the sum of $7.1 billion. Singapore invested $3.8 billion, Malaysia spent $3.4 billion and South Korea invested $2.5 billion.
This kind of investment forms part of a trend that is continuing to grow and this was due to the fact that the demand from China could continue to grow. This is due to the fact that many investors may not have even considered the Australian Market but there is every possibility they will in the future.
By 2020, it is expected that investment from Chinese investors will as much as triple on a worldwide sale, therefore, this increase in China is not too much of a shock.
In terms of Chinese property investment, the USA showed the largest amount of interest and this was followed closely by Australia. However, since 2015, the government in Australia had begun dealing with those investors who purchase real estate in Australia illegally.
For those people purchasing property in Victoria who are not residents they have to pay additional stamp duty to the sum of 3% as well as absentee land tax of 0.5% which comes into force this year.
There was an assumption that the investment from Chinese investors would slow down due to these taxes but in reality, many believe it will continue.
Chinese buyers are cautious when it comes to purchasing in a country that does not have the correct regulations in place. Australia however, has increased its regulations and this in turn has given confidence to Chinese investors.
The purchases made by Chinese buyers are not only for investment purposes. This is down to the fact that they have relatives living there, have friends or even want their child to go to school there.
The increase in Australian property development was partly down to the fact that many new dwellings were approved and this meant that the value of property of plan rose from $16.48 billion to $28.69 billion. There was also an increase in spending by individual investors and this pretty much doubled 70 $14.38 billion.
There was also an increase in foreign investment which jumped to $10.09 billion from $7.17 billion.
For those purchasers who live offshore, they are allowed to purchase new homes that have been approved by the FIRB as well as older properties but this has to be done under certain circumstances.
Residents who only plan to live in a property on a temporary basis are permitted to purchase one established dwelling but they have to sell the property within three months after they no longer live there. They are also able to purchase a dwelling.
During the 2014-15 financial year, there were 36,841 real estate proposals approved which is a considerable rise from the previous year of 23,054.
Once again, China were top of the list for total investment and this came to $46.5 billion, once again they are ahead of the US, Singapore, Japan and Canada.
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