Chinese investors are making substantial investments in Melbourne's real estate market, with market analysts suggesting that this influx is driving price increases in certain areas of the city. Recent data from the federal Treasury reveals that Victoria has become the top destination in Australia for international property buyers, with significant interest from Chinese investors. PropTrack data highlights that searches from China are concentrated in Melbourne's CBD, as well as the suburbs of Balwyn, Balwyn North, Camberwell, and Glen Waverley.
According to Treasury reports, China led the field for approved residential real estate investment proposals in Australia for the first half of the 2023-24 financial year, contributing $1.5 billion between July and December of the previous year. This figure is a decrease from the $3.4 billion recorded in the 2022-2023 financial year. In the last quarter of 2023 alone, Chinese investors allocated $800 million to Australian real estate, with Hong Kong, India, Vietnam, and Taiwan-based investors adding another $400 million.
A report from the Foreign Investment in Australia office indicates that 2,240 Victorian properties were purchased by overseas investors, double the 1,121 transactions seen in Queensland, the second most popular state for such purchases. While only Australian citizens and permanent residents can acquire established properties, international investors must obtain approval from the Foreign Investment Review Board (FIRB) to purchase new properties.
Overall, foreign buyers invested $4.9 billion in 5,360 Australian homes during the 2022-2023 financial year, marking a 27 percent increase from the previous year. According to Daniel Ho, co-founder and group managing director of Juwai IQI, overseas interest is rebounding post-pandemic, with Victoria attracting the highest number of transactions involving millionaire buyers.
David Morrell, a buyer’s advocate for Melbourne’s high-end market, reports that suburbs such as Toorak, Canterbury, Camberwell, and Box Hill have seen rising prices due to foreign investment. He attributes this trend to investors seeking safe havens for their money, with high-end markets like Toorak providing a secure investment.
Andrew Dimashki, director at Harcourts Judd White, notes that demand from international investors has driven up median house prices by up to 200 percent in Melbourne’s eastern suburbs over the past decade. For example, a recent sale in Glen Waverley saw a six-bedroom house sell for $3.9 million, exceeding its $3.4 million reserve due to competitive bidding from overseas buyers. Dimashki highlights that the influx of high-end international buyers is creating competitive conditions in the market.
In summary, foreign investment, especially from Chinese buyers, is significantly influencing Melbourne's real estate market, driving up prices in sought-after areas. Victoria leads the nation in international property purchases, reflecting the city's strong appeal. While foreign investment is boosting housing supply, it is also contributing to rising property prices and heightened market competition.
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