25/06/2015
Australia is ‘very attractive’ to offshore investors in 2015
Angie Zigomanis, Senior Manager Residential of BIS Shrapnel says Australia looks “very attractive” in 2015 because of its stable market, conservative governance and current yields on investment.
Countries including Germany, the US, and the UK see Australia as “a de facto to Asia while also a close cultural fit”.
“It offers the ideal mix of geographical proximity to Asia and a culture that is desirable, and a strengthening exchange rate,” Zigomanis says.
The weakening Aussie dollar is also fuelling demand from the Netherlands, Germany, the USA, Hong Kong and Singapore.
According to FIRB data, the dollar value of real estate investment approvals by country last financial year looked like this:
China $12,406m
USA $6,135m
Singapore $4,303m
Canada $2,945m
Malaysia $2,038m
UK $1,795m
Netherlands $1,720m
NZ $1,362m
Hong Kong $1,279m
Germany $1,169m
South Korea $1,083m
The foreign investment scene: A snapshot
According to the latest Foreign Investment Review Board Annual Report, the real estate sector had a significant increase in investment approvals last financial year; 23,428 versus 12,025 a year prior.
That’s a jump of 95%.
In dollar terms, the growth is less stark (48%); approved investment was worth $74.6 billion in 2013-2014, up from $51.9 billion in 2012-2013.
Both commercial and residential real estate grew year-on-year. Last year foreign investment approvals for commercial real estate was worth $39.9 billion (up 15%) while foreign investment approvals for residential real estate was worth $34.7 billion (a rise of 102%).
The real estate sector represents the largest portion of all foreign investment types in Australia today; 44.6% of the total foreign investment pie.
The big M: Melbourne is hot global property
Melbourne is hot global property
A new report calls out Melbourne as a future superstar of the global real estate market, betting that prices will continue to climb.
Candy & Candy, Savills and Deutsche Asset & Wealth identified 12 cities globally where they believe residential property price growth could overtake other, more established cities like New York and London. Prices in the cities are currently lower than many other leading destinations, making them attractive to both local and international investors.
Melbourne is second on the list, with Tel Aviv coming in number one. Chennai ranks number 12.
“For many ultra-high-net-worth-individuals real estate has become a unique asset class, but investment to date has focused on prime property in the top tier world cities which have shown record market growth,” said Nick Candy, CEO of Candy & Candy.
“Real estate will continue to play an important part in global investment with investors now looking beyond established safe havens and prime world cities.”