The number of foreign buyers of new Australian homes tripled last financial year, a new report from the Foreign Investment Review Board Report shows.
China is now by far the biggest foreign purchaser of Australian real estate, splurging $12.4 billion in 2013-14 – more than double the investment from the United States and triple Singapore’s outlay.
In 2012-13 China’s investment was just $5.9 billion.
The foreign appetite for Australian homes has centred on new dwellings, with total spend on off-the-plan apartments leaping from $5.73 billion to $16.4 billion.
The chief executive of Chinese property website Gifang.com, Michael Yang, said that Australia’s stable economy and top schools were the main drawcards for foreign buyers.
“People believe that this is a safe place for them to invest,” he said.
Mr Yang also said the recent strength of the property market had made Australian real estate even more attractive to offshore buyers.
Under the current rules foreign buyers are permitted to purchase new homes, provided they receive FIRB approval.
Even so the foreign spend on existing homes jumped almost $2 billion to $7.17 billion last financial year.
Temporary residents can buy one established dwelling to live in, on the condition they sell the property when it’s no longer their residence.
And temporary and non-residents can buy an established property for redevelopment, provided construction begins within two years.
The Abbott government recently proposed tough new regulations for foreign buyers of Australian real estate.
Foreign buyers may soon be slugged with steep application fees for each attempt at buying property.
A national register for foreign buyers has also been proposed.
“We need to make sure that all foreign investors are following the rules, and that those foreign investors who break the rules are not able to profit from breaking the law,” the Prime Minister,Tony Abbott, announced earlier this year.
In March, Treasurer Joe Hockey announced the forced sale of the $39 million Point Piper mansion Villa del Mare purchased by one of China’s richest men in November, because it was sold in contravention to the existing foreign ownership laws.
China becomes Australia’s number one investor
For the first time China is the main source country of foreign investment, pushing the United States into second place.
China’s total investment last financial year was $27.7 billion, while the US accounted for $17.4 billion.
Canada is Australia’s third largest foreign investor ($15.4 billion) followed by Malaysia ($7.2 billion).
In 2010 the United Kingdom was the second biggest foreign investor in Australia, but is now the 12th.