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According to some experts, foreign interest in Australia's real estate market is here to stay, especially in the case of Chinese property buyers.
The finance arm of Ausin Group recently told BusinessDay that it plans to double the amount of home loans it brokers for home buyers thanks to interest from the Chinese.
"I don't see the trend slowing down. It's here to stay," Ausin's Sydney-based managing director Joseph Zaja stated in a 6 August article.
Mr Zaja went on to tell BusinessDay that when Ausin first got off the ground, financial institutions would only finance developments where 30 per cent or less were sold to overseas buyers.
"Now, that's up to 100 per cent in some cases," he said.
It's this increase in foreign buyers that has led some commentators to blame this demographic for surging home prices. However, as pointed out by a recent report from the Centre for Independent Studies (CIS) titled Eight Housing Affordability Myths, this simply isn't the case.
"Foreign investors and domestic investors have been made scapegoats when it comes to housing affordability, but they are no more to blame for rising house prices than first-home buyers," said CIS research fellow Dr Stephen Kirchner.
"The problem is not too much demand, but too little supply."
However, this hasn't prevented Australian officials from heading overseas on a fact-finding trip geared toward Chinese interest in Australian real estate.
The Australian reported on July 29 that four MPs from the House of Representatives Economics Committee left for China as part of a yearly political exchange program. However, the trip was also focused on Chinese investment in Australia and how it's affecting house prices for domestic buyers.
"The data clearly show an increase in the level of approvals for foreign residential purchases over time, but it is difficult to know how much this has boosted net demand for Australian housing," stated Reserve Bank of Australia assistant governor Christopher Kent and deputy head of economic analysis David Orsmond in a 27 June statement.
Data from the Foreign Investment Review Board shows an increase in approvals over the past few quarters, but approvals do not always translate to purchases.
As CIS stated in its report, it's much more likely that rising prices are due to a mixture of limited housing inventory and ultra-low interest rates boosting demand. With this in mind, it's important for foreign buyers to work with qualified professionals when pursing homes for sale in Australia.
