Foreign Investors Purchase 1 In 10 NSW Homes

Figures reveal that 11% of all residential properties sold over the July to September period in 2016 were bought by foreign investors.

The data, released under the freedom of information laws, also found that one third of these foreign buyers were Chinese nationals.

The period saw 2,995 properties sold to foreign buyers and $115 million raised in stamp duty.

The same period saw $766 million paid in stamp duty by Australian nationals.

It’s suspected that the figure would be much higher for the Greater Sydney region specifically, due to the area’s incredibly hot property market, but figures were not made available for specific regions of NSW.

Foreign investors currently pay a 4% foreign investor stamp duty surcharge, which was introduced last year by the NSW state government.

However, it has been reported that NSW Treasurer Dominic Perrottet plans to increase this surcharge in the forthcoming June budget.

NSW Opposition Leader Luke Foley is reportedly pushing for the surcharge on foreign investor stamp duty to increase to 7%, along with a doubling of the new land tax on foreign investors, from 0.75% to 1.5%.

 

So who’s buying our properties?

Chinese nationals accounted for 33% of total properties purchased by foreign nationals, followed by the UK and New Zealand with 11% and India with 10%.

Top 10 countries responsible for foreign investment in Australian property

  • China – 33%
  • UK – 11%
  • NZ – 11%
  • India – 10%
  • Nepal – 3%
  • Malaysia – 3%
  • South Korea – 2%
  • Vietnam – 2%
  • USA – 2%
  • Indonesia – 2%

Foreign investment in the government’s crosshairs

These high rates of foreign investment haven’t escaped the attentions of the federal government.

Liberal MP Michael Sukkar told Sky News that foreign investment, among other things, was being reviewed by the government for their mid-year budget’s housing affordability package.

 

The government is also reportedly preparing to introduce a ban on foreign investors buying more than half the homes or apartments in any new property developments.

The goal is to ease the supply issue the government claims is one of the main causes of the housing affordability crisis.

A similar ban was in place before 2009 to ensure that adequate housing stock was available to Australians.

This was scrapped by the Labor Government during the Global Financial Crisis to encourage increased foreign investment in the country’s property market.

The Property Council of Australia has warned that the proposal will not solve the problem of housing affordability and will result in decreased investment.

A spokesman for Treasurer Scott Morrison declined to reveal the Government’s plans, telling News Corp that “the government has taken consistent and determined action when it comes to foreign investment in land and residential real estate”.

 

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