MORE than a quarter of new homes built in Queensland are being bought by foreign buyers, new research from ANZ reveals.
MORE than a quarter of new homes built in Queensland are being bought by foreign buyers, according to new research from one of Australia’s big four banks.
Foreign investors are estimated to have bought between 11,000 and 18,000 homes in the state during the 2015/16 financial year, making up 10 to 15 per cent of total housing turnover.
But the number is significantly higher when it comes to new homes, with foreign buyers purchasing between 25 and 45 per cent of newly-constructed dwellings in Queensland in that period, according to new research from ANZ Bank.
ANZ senior economist Daniel Gradwell said foreign property purchases in Queensland had increased fivefold in five years, largely driven by Chinese nationals.
“In Queensland, the vast majority of foreign approvals were for the construction of new dwellings — about 95 per cent — which probably suggests it’s heavily weighted in the apartment sector,” Mr Gradwell said.
But Real Estate Institute of Queensland chief executive Antonia Mercorella said she was skeptical about the research and doubted foreigners were buying as much as 45 per cent of new homes in the state.
“That seems unlikely to us from our experience at the coal face of selling real estate,” she said.
“It is important to note that while China is the undoubtedly the largest proportion of our foreign buyers, the Chinese government recently put a ban in place on Chinese nationals buying overseas real estate so it’s unlikely these numbers reported in the ANZ report – if true – will continue.”
Mr Gradwell said the research showed there was a clear divergence between the impact of foreign buyers on dwelling prices and housing construction in Australia.
“It’s clearly impacting the construction sector, which has helped the economy transition away from mining and support employment growth,” he said.
“The sizeable foreign-buyer share of newly-constructed housing implies that foreign demand has been an important contributor to Australia’s recent construction boom.
“If this demand were to dry up suddenly, Australia’s construction pipeline would likely be notably weaker than currently expected.”
And while some in the industry blame increased foreign activity as one reason why house prices in Sydney and Melbourne have soared in recent years, Mr Gradwell’s research suggests it may not be a major factor.
“The relatively lower share of total market activity suggests that foreign buyers have not been the primary driver of the price growth in recent years,” he said.
Nationally, ANZ estimates foreign buyers purchased between 35,000 and 60,000 homes in 2015/16, making up 7 to 13 per cent of total housing turnover during the period.
Mr Gradwell said the size of foreign ownership of Australia’s housing stock was significant, but not large enough for ANZ to be concerned about a foreign exodus from the housing market.
ANZ compiled the research using Foreign Investment Review Board data on approvals and recent estimates from the Reserve Bank of Australia.
Mr Gradwell pointed out no one could say with any certainty as to what impact increased foreign investment has had on the housing market because there was no concrete data or stand-alone body to monitor activity beyond the building approval process.
Credit Suisse released research in October, using revenue figures obtained from state governments under freedom of information requests, estimated fewer than one in 10 new homes in Queensland sold to foreign buyers.
The investment bank estimates foreign investors pour $700 million into residential property in Queensland on an annual basis.
But that’s a small proportion of the total value of Australian real estate, which is estimated to be $6.7 trillion nationally.
Originally Published: www.news.com.au