Everything old is new again for foreign buyers

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The second quarter of 2015 saw foreign investors move their sights from new to existing properties according to the results of a survey by the National Australia Bank.

The results of the NAB’s quarterly residential property survey show foreign purchases of new residential real estate in Australia fell over the second quarter from 15.6% to 12.8%, purchases of existing real estate by foreign buyers roses from 7.5% in the first quarter to 8.6% in the second.

In NSW and Victoria, foreign buyers accounted for one out of every 10 purchases of existing dwellings over the second quarter, while nationally they accounted for 11.4% of all established apartment sales and 9.4% of house sales.

The figures come despite increased focus by authorities on the sale of existing property to foreign buyers after a number of high profile breaches of the rules covering foreign investment in recent times.

NAB Group chief economist Alan Oster said Victoria seemed to be growing in popularity with foreign buyers.

“It was however notable that foreign buyers had a much bigger presence in the established housing market in Victoria, with a market share of just over 16%,” Oster said

“This was much higher than in all other states. Interestingly, the Survey also reported a much higher share of foreigners buying dwellings or land (23%) for re-development in Victoria.”

Looking at new buildings, Victoria’s apartments were also attractive to foreign buyers, with 28% of sales in the second quarter heading off-shore.

Comparatively only 16.5% of new NSW apartments were sold to foreign money.

The survey also revealed that first home buyers were more active over the second quarter, accounting for one in every four sales over the period.

The survey results showed no increase in the level of expected price growth of 2.3% over the next two years, however rental yields are expected to fall as rental growth slows in that period.
 

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