Singapore trumps China as Australia’s biggest foreign property investor

Singapore has become Australia's biggest source of foreign real estate investment, overtaking China.

A study by real estate technology group Juwai IQI showed investment from Singapore investors has outpaced that of Chinese investors over the recent financial years.

Australia’s Foreign Investment Review Board (FIRB) approved $19.3bn in investment from Singapore entities toward Australian real estate during the two years between June 2018 and July 2020.

This was more than the $13.2bn investment from Chinese investors and institutions during the same period.

Investment from Singapore now accounts for 17% of the total foreign real estate investment in Australia.

Over the past five years, there was a big upwards shift in the interest of Singapore entities towards Australian real estate.

 In fact, FIRB-approved investment from the city-state only hit $5bn in 2016-17, before quickly jumping to $8bn the following year and over $9bn in the next two years.

On the other hand, China's share of annual investment in Australian real estate has declined to 13%, from its recent peak of 26% during the 2015-16 financial year.

Juwai IQI Group co-founder and executive chairperson Georg Chmiel said while Singapore's real estate investment in Australia has largely been led by the city-state's sovereign wealth fund GIC, individual home buyers have also become more active.

"Australia is like a big backyard for many Singaporeans. Perth is just five hours away by plane, and the East Coast cities are also within relatively easy reach," Mr Chmiel said.

"For retirees, second home buyers, families with school and university age children, and property investors, Australia is an obvious destination."

However, the travel restrictions and border closures amid the COVID-19 pandemic have impacted the flow of foreign investments to real estate in Australia.

Still, Mr Chmiel believes Singaporean investment has continued to increase despite the global concerns on the pandemic.

"When the pandemic is finally behind us, we expect Australian homebuying by Singaporeans to continue to increase,” he said.

“The total value of Singaporean investment into Australian real estate will vary from quarter to quarter.

"A big portfolio acquisition by GIC or a Singaporean REIT can distort the numbers, but the trend is clear. Singaporean real estate investment is climbing.”