- China spending on Aussie real estate surges to A$24.3 billion
- Investors from China still looking to spend more, survey shows
Chinese appetite for property in Australia shows no sign of waning after buyers doubled investment in the nation’s homes and offices for a second straight year.
Spending on Australian residential and commercial real estate rose to A$24.3 billion ($18.4 billion) in the 12 months through June 2015, up from A$12.4 billion a year earlier and A$5.9 billion in 2013, according to the Foreign Investment Review Board’s annual report.
All Chinese investors in a survey conducted by KPMG and the University of Sydney want to allocate more money to Australia, a separate report showed on Monday. Real estate is fueling inflows from the world’s second largest economy, which last year overtook the U.S. as Australia’s largest foreign investor.
“Overall we are seeing a strong story of Chinese investment into Australia’s broader economy which is in line with premium products, services and lifestyle-oriented themes,” Doug Ferguson, head of KPMG Australia’s Asia and International Markets and co-author of the report, said in a statement.
Purchases by foreigners, many with a connection to China, helped drive an almost 55 percent jump in home prices across Australia’s capital cities in the past seven years as mortgage rates dropped to five-decade lows. The rising demand has triggered community concern that locals are being priced out of the property market, prompting the government to tighten scrutiny of foreign investment.
China also stepped up administrative measures in January to slow the flight of capital that Bloomberg Intelligence estimates reached $1 trillion last year as the yuan was devalued and Chinese equities tumbled.
Total foreign investment into Australia climbed to A$194.6 billion in 2014-15 from A$167.4 billion the previous year, with spending under A$50 million comprising about a fifth of the total, according to FIRB. An “overwhelming majority” of such deals relate to real estate, with residential property approvals surging 60 percent over the period, it said.
The U.S remains the second largest foreign investor in Australia after pumping in A$25.1 billion during the period, up 44 percent from a year earlier.