Invest
Market uncertainty fails to discourage foreign property investors
While interest from foreign investors in Australian property has remained strong, HLB Mann Judd warned that tax increases could see demand shift to other markets.
Market uncertainty fails to discourage foreign property investors
While interest from foreign investors in Australian property has remained strong, HLB Mann Judd warned that tax increases could see demand shift to other markets.
In spite of a range of challenges including pandemic-driven uncertainty, HLB Mann Judd Melbourne partner Josh Chye has suggested that demand and interest in Australian property from foreign investors remains strong.
“New enquiries from mainland Chinese investors have scaled back significantly but other parts of the Asia-Pacific region, including Singapore and Hong Kong, are consistently strong and Australia remains an attractive jurisdiction despite the relatively high taxation rates,” he said.
“This provides strong support of Australia’s property market despite concerns about rising interest rates or an economic downturn.”
Mr Chye pointed out that Australia has among the highest rates of taxation in the region for both individuals and corporates alongside above average tax costs for foreign buyers of real estate.
He indicated that increasing tax costs had become a cause for concern and frustration among some foreign buyers who could unexpectedly face higher costs including stamp duty or land tax.
“While the high tax rates are a consideration for many foreign buyers, this is balanced by the fact that Australia remains a stable jurisdiction for real estate investors. Price growth, particularly in Sydney and Melbourne, has also driven interest from foreign buyers,” Mr Chye noted.
“However, if there continues to be a trend of continued tax increases or removing of tax concessions solely focused on foreign investors, this will no doubt hurt Australia’s reputation and standing as a stable jurisdiction for foreign investors into Australia and other markets such as United States, Canada and the United Kingdom will increasingly look more attractive as also alternative destinations for real estate investments.”
While residential property prices in Sydney and Melbourne have started to decline, Mr Chye said that the recent stretch of strong growth meant that the local market was still attracting foreign investors.
“The recent harsh lockdown restrictions in China have created more interest in investing here. The key challenge is not the desire but the ability for foreign capital to be physically transferred here, as certain countries have tightened their controls around money leaving the country,” he suggested.
Additionally, Mr Chye argued that recent market uncertainty globally would most likely not have an impact on interest in Australian property assets.
“Inflation and interest rate increases are common across the globe so if rates go up, it will put pricing pressure on property, however the demand will still be there,” he said.
“The pricing pressure will be global so from that perspective, it should not detract from investors looking to acquire Australian property assets.”
Property
Australia's housing market is entering a ‘broad-based correction phase’
Westpac believes the housing market downturn is now underway. ...Read more
Property
ANZ now expects house prices will end the year lower
With higher interest rates on the horizon, the bank is forecasting larger house price declines than previously expected. ...Read more
Property
Which capital cities are most attractive to property investors?
A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities. ...Read more
Property
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments. ...Read more
Property
Aussie home buyers now need to save for over 11 years for a deposit
Since early 2020, the time needed to save for a deposit has increased by more than two years. ...Read more
Property
HSBC forecasts 2023 house price decline of up to 10%
The firm had previously predicted a modest rise for house prices next year. ...Read more
Property
Perth house prices continue climbing to a record high
While growth may have come to an end in Sydney and Melbourne, Perth house prices are still on the rise. ...Read more
Property
Stamp duty significantly slowing path to purchase for FHB
Saving for a home takes years for the typical first-time buyer. In Australia’s largest cities, as much as two years are spent simply building up the funds to pay the cost of stamp duty, according to...Read more
Wrapping up an eventful 2021
Listen now
What Omicron means for property, and are units right for first-time buyers? What is equity crowdfunding? Are industry super funds tapping into member funds to save their skins?
Listen now
Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now
Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now
Property
Australia's housing market is entering a ‘broad-based correction phase’
Westpac believes the housing market downturn is now underway. ...Read more
Property
ANZ now expects house prices will end the year lower
With higher interest rates on the horizon, the bank is forecasting larger house price declines than previously expected. ...Read more
Property
Which capital cities are most attractive to property investors?
A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities. ...Read more
Property
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments. ...Read more
Property
Aussie home buyers now need to save for over 11 years for a deposit
Since early 2020, the time needed to save for a deposit has increased by more than two years. ...Read more
Property
HSBC forecasts 2023 house price decline of up to 10%
The firm had previously predicted a modest rise for house prices next year. ...Read more
Property
Perth house prices continue climbing to a record high
While growth may have come to an end in Sydney and Melbourne, Perth house prices are still on the rise. ...Read more
Property
Stamp duty significantly slowing path to purchase for FHB
Saving for a home takes years for the typical first-time buyer. In Australia’s largest cities, as much as two years are spent simply building up the funds to pay the cost of stamp duty, according to...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
