The Urban Developer
AdvertiseEventsWebinarsUrbanity
Industry Excellence
Urban Leader
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
Urban Leader Awards Logos RGB White
NOMINATIONS CLOSE SEPTEMBER 12 RECOGNISING THE INDIVIDUALS BEHIND THE PROJECTS
NOMINATIONS CLOSING SEPTEMBER 12 URBAN LEADER AWARDS
LEARN MOREDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
print
Print
RetailStaff WriterTue 26 Aug 14

Foreign Investment Reaches $5.9b Record

I

Investor restrictions and foreign official interest rates of almost zero, coupled with Australia’s stable economic and political climate, are driving a surge in foreign investment in Australian property with a record $5.9 billion outlaid in the last financial year.

That is 60 per cent more than the $3.5 billion recorded in the previous 12 months, according to

Savills Australia research.

The research found Asians had taken the lion’s share with acquisitions totalling $3.9 billion, or 67 per cent of sales by value, with North American ($1.057bn) and European ($913m) investors taking 18 and 15 per cent respectively, while a second report out of Savills Shanghai office asserts Chinese investments to date have just been the opening salvo.

National Head of Research Tony Crabb said it was not news that foreign investors had taken a shine to Australian property in recent times and there had been much written about the interest of our Asian neighbours but these were "unprecedented figures".

"The last twelve months buying activity is off the charts as far as recent history is concerned. It is almost as if they have been dipping their toe in the water, they like the temperature and now they are just diving right in," Mr Crabb said.

He said the typical drivers were Australia’s reputation for political and economic stability and the way it came through the GFC relatively unscathed.

"What has happened in the last 12 months for foreign investors is that circumstances at home are not as attractive in terms of returns – official interest rates are well below Australia’s - political and economic conditions may not be as stable, and property investment markets may not be as mature as Australia’s including restrictions on domestic investment,” he said.

"The fact that their compatriots have been here and tested the water before them has also been an important factor.”

The latest RBA figures show the official US interest rate is currently at 0.13 per cent while the European Central Bank rate is 0.15 per cent, UK, 0.50 per cent and Canada, 1.00 per cent.

According to Savills World Research Shanghai report “China Plc ventures overseas – Who's buying and why?”, Chinese investments to date are the opening salvo or the exploratory foray for what is expected to be a much bigger wave of capital in coming years.

The report states that since 1990 Chinese domestic real estate investment have grown from RMB25.3 billion to RMB7.2 trillion - 283 times 1990 levels.

Mr Crabb said as China’s property markets had developed, competition had increased and scope for further rapid growth had become more limited.

"In order to maintain growth and dynamism, companies, developers and investors are increasingly turning overseas to find new opportunities," Mr Crabb said.

The research revealed the love affair with CBD office buildings showed no signs of abating with 84 per cent of transactions occurring in office markets and the balance split 14 per cent ($804 million) into retail and just two per cent ($142 million) into industrial.

Of the investment into office markets, Asian investors made up two thirds, spending almost $3.3 billion dollars. North American investors spent $932 million (19 per cent) and European investors nearly $740 million accounting for 15 per cent.

RetailOfficeIndustrialAustraliaSector
AUTHOR
Staff Writer
"TheUrbanDeveloper.com is committed to delivering the latest news, reviews, opinions and insights into the best of urban development from Australia and around the world. "
More articles by this author
ADVERTISEMENT
TOP STORIES
Stockland bumps up its apartment pipeline in melbourne and sydney
Exclusive

Stockland Re-Enters Density in $5bn Apartment Play

Renee McKeown
4 Min
Woolloongabba Precinct Vulture St
Exclusive

Brisbane Developer in Cross River Rail Compensation Tussle

Clare Burnett
4 Min
The Mondrian Gold Coast hotel's food and beverage is driving profits
Exclusive

Touch, Taste, Theatre: What’s Driving Mondrian’s Success

Renee McKeown
6 Min
Fortis’ display suites are designed as brand environments first, with tactile details and curated design to build buyer confidence before project specifics.
Exclusive

Relevant or Redundant: Will Tech Kill Display Suites?

Vanessa Croll
7 Min
Exclusive

Missing Heart: Why The Gold Coast Needs a CBD

Phil Bartsch
7 Min
View All >
JQZ Parramatta EDM
Residential

JQZ Plots 10-Storey Addition to Parramatta ‘Auto Alley’ Plans

Clare Burnett
South Melbourne social housing precinct
Affordable & Social Housing

South Melbourne Housing Precinct Revamp Takes Next Step

Leon Della Bosca
Aerial view of Caboolture and Bruce highway to Brisbane with Bribie Island Road crossing, Queensland, Australia
Policy

Queensland’s $2bn Push Opens New Housing Front

Vanessa Croll
First projects named in a statewide plan to fast-track supply, including thousands of homes in a major growth region…
LATEST
JQZ Parramatta EDM
Residential

JQZ Plots 10-Storey Addition to Parramatta ‘Auto Alley’ Plans

Clare Burnett
3 Min
South Melbourne social housing precinct
Affordable & Social Housing

South Melbourne Housing Precinct Revamp Takes Next Step

Leon Della Bosca
2 Min
Aerial view of Caboolture and Bruce highway to Brisbane with Bribie Island Road crossing, Queensland, Australia
Policy

Queensland’s $2bn Push Opens New Housing Front

Vanessa Croll
2 Min
Stockland bumps up its apartment pipeline in melbourne and sydney
Exclusive

Stockland Re-Enters Density in $5bn Apartment Play

Renee McKeown
4 Min
View All >
ADVERTISEMENT
Article originally posted at: https://www.theurbandeveloper.com/articles/foreign-investment-reached-5-9b-record