Foreigners are making it tougher for locals to buy a new home in WA, with figures revealing $300 million worth of residential property was snapped up by overseas investors in the first three quarters of 2022-23.
The data, provided to The Sunday Times by the Australian Taxation Office, shows foreign buyers spent $100m a quarter in the State, which works out to about $33.3m a month or, just over $1m a day.
Nationally, $5.9 billion was splurged on homes by overseas buyers from July to March at a time when demand outstripped supply, with China leading the charge with $2.3b spent in that period, followed by Hong Kong, Vietnam and Taiwan, a Treasury report shows.
A University of Technology Sydney poll, published this month, showed 73 per cent of Australians believe foreign buyers from China were driving up housing prices, while almost 80 per cent believed Australia should restrict the amount of investment permitted from Chinese investors.
While local homebuyers already competing with frenzied Eastern States investors may feel despondent, Ray White chief economist Nerida Conisbee insists foreign investment helps to bolster supply rather than strip it.
While countries such as New Zealand and Canada have enforced a blanket ban on the foreign purchase of residential real estate, Ms Conisbee said before the restriction, there were no limitations placed on overseas buyers, unlike in Australia.
“Foreign capital’s not bad if we can utilise it to our advantage and the way the Australian Government tries to harness it is by restricting foreign buyers to only buy new properties,” she said.
“They can’t buy anything established, they can only buy a new property and the reason they do that is to increase housing supply increase the sup- ply of rental homes and also to kickstart bigger projects.”
This was evident, she said, when foreign investment in Australia at the end of last decade led to a big increase in construction and a lot more rental properties.
Ms Conisbee said foreign investors predominantly bought apartments and most projects needed a pre-sale commitment before getting bank approval.
Limnios Property Group managing director James Limnios agreed foreign investment was necessary to support more apartment developments, but said tighter policies were needed to ensure that it benefited West Australians.
“We desperately need foreign investors for off-plan sales but I would restrict them from buying land so that they can only buy land if they are going to build a house to rent,” he said.
Article by Raquel De Brito of the West Australian published on 18 January 2023.
