Australian real estate has remained the “most appealing” for those looking for opportunities within Asia Pacific, with Melbourne ranked first and Sydney coming in third.
The influx of Asian investment into Australian real estate has noticeably increased in recent years, with Juwai.com reporting that in 2018 Chinese investors poured $US 17.4 billion into our real estate. Buyer interest spiked in the final three months of 2018, coinciding with declines in the Australian dollar compared to the Chinese yuan.
Our market is a magnet for international investors, as they account for around 40 percent of all transactions for prime assets in Australia.
We’ve taken a look at why foreign buyers invest in our market.
Favorable movement in currency rates provides them with an incentive to direct investment into our real estate – it means that foreign purchasing power is strong. Additional factors also have an impact, such as the solid foundations of the Australian market, high yields, increasing rental prospects and the fact that Australia is triple rated.
Yields are currently higher in Australia than in other Asia Pacific gateways, boosting the appeal for international investors. The current slow-but-steady returns and developed market makes operating as a foreign investor easier and more attractive.
The lack of viable alternatives closer to home are contributing – for example, bank deposits earn unnaturally low rates of return in China and the stock exchange there is still immature and was among the worst performing globally last year.
Melbourne looks set to continue receiving the highest share of foreign investment in real estate this year, with Sydney second then Brisbane and Adelaide. According to Foreign Investment Review Board data, Victoria receives $4 of foreign real estate investment for every $3 that it does into NSW and $2 for Queensland.
If you’re interested in discovering more about investing in commercial property in Melbourne, call our team today on 03 9654 2311.