New data underlines importance of foreign investment

Foreign investment is an essential ingredient in Australia’s property industry that helps drive new residential supply and ease pressure on housing affordability, according to new data released today.

The ANZ/Property Council Survey June quarter 2015 results show relatively stable but significant levels of foreign investment is helping bring new housing supply to market.

More than 18 survey respondents were asked what level of foreign purchasers occurred in their newly constructed residential and non-residential projects. The sentiment from the survey indicates that nationwide, foreign investment accounts for around 22 percent of new residential property sales, and this has remained constant over the previous two quarters.

Property Council of Australia Chief Executive Ken Morrison said the survey results underscore the fundamental importance of foreign investment in making new housing stock available for Australians.

“The only way to improve housing affordability is to get more housing on the ground earlier, and foreign investment is a key ingredient in making this happen,” Mr Morrison said.

“Foreign investors don’t reduce the availability of housing for Australians, they increase it.

“Every newly constructed home that a foreign investor purchases enables up to four other homes to be built.

“Foreign investment provides the crucial early stage capital to get big new housing developments over the line and into construction, delivering the twin benefits of more jobs and more new homes.

“Our research clearly establishes the critical link between foreign investment and new housing supply.

“Big new fees on foreign investors will act as a deterrent and without foreign investment new projects will come online later or not at all.

“Introducing a new stamp duty-like fee on foreign investors will actually diminish the supply of housing, and the losers in this equation will be ordinary Australians.

“There is a striking correlation in the data between those states with high confidence and solid forward expectations and those that record solid levels of foreign investment, like NSW and Victoria.

“Continued foreign investment in new housing supply is a critical element to ensuring we meet demand and keep pressure off house prices.”

ANZ Chief Economist Warren Hogan said the foreign investment was playing a key role in boosting housing construction.

“Low interest rates, increasing home prices and solid population gains, look to be buoying expectations of increased housing construction activity in the coming year, according to the ANZ/Property Council Survey,” Mr Hogan said.

“In addition to the positive impact of these housing market conditions, solid foreign investment in new housing has also continued to drive a strong upturn in housing construction.”

Media contact: Fiona Benson | M 0407 294 620 | E [email protected]