Foreign investors, particularly from Asia, are purchasing an unprecedented amount of land in Sydney including premium homes and office buildings, according to a report by the Daily Telegraph.
Demand in the Eastern Suburbs, North Shore and CBD areas is driven largely by new money from Asia, together with some traditional European investors. Key property companies are promoting Australian properties in Singapore and Hong Kong, promising secure and safe growth.
“We see a lot of interest from Singapore, Hong Kong, Tokyo, and the UK,” said Byron Rose, head of Real Estate Buyers Association of Australia. “They know the market is depressed – they are making huge capital gains and are reinvesting into the market.”
Last month, CB Richard Ellis held a property expo in Hong Kong promoting a range of commercial, residential and retail opportunities in Australia. Rick Butler, senior managing director of international investments at CBRE, said that a particular reason for the trend is that Australian banks are not lending.
“The banks are saying they are lending but in my view they aren’t. When we offer a major office building we are finding the top two offers are usually from a foreign buyer,” said Mr. Butler. “The foreigners are there because they see Australia as safe, secure and actually having growth, which puts us in a much better position than old Europe and the US.”
Foreign investors picked up A$23.4 billion in Australian property assets, which include 988 land parcels and 3,639 new and existing homes, based on the latest figures from the Federal Government’s Foreign Investment Review Board compiled in 2008 and 2009.