Indian Investors Leading the Surge in Overseas Interest for Australian Properties

Recent data from the latest PropTrack report shows a slight increase in overseas interest in Australian properties compared to the previous year.

Searches from India have gone up by 23 percent in October, indicating a growing desire to purchase or rent homes in Australia.

Similarly, property seekers from the United Kingdom have shown more interest, while rental searches from Hong Kong have increased by 4 percent.

On the other hand, searches from New Zealand have dropped in October, as is typical for this time of year but may pick up again in December.

Searches from the U.S., influenced by political changes, saw a surge during the summer but decreased by 25 percent between September and October.

Preference for Higher-Priced Properties among Foreign Buyers

The latest search trends reveal that overseas property seekers are focusing on higher-priced properties compared to local Australian buyers.

Local homebuyers typically look for properties around $600,000 on realestate.com.au. However, the availability of properties in this price range, particularly in major capital cities, is dwindling.

In contrast, foreign buyers tend to focus on properties around $1 million, especially in sought-after inner-city suburbs like Brighton, South Yarra, and Camberwell in Melbourne.

Interestingly, buyers from India are more budget-conscious, often looking at homes below $600,000 and opting for developing suburbs in Melbourne’s west, such as Tarneit and Point Cook, which are more affordable.

Foreign Buyers Represent a Small Percentage of the Market

According to data from the Australian Taxation Office (ATO) released in June, foreign buyers are continuing to invest significantly in Australia’s real estate market.

In the 2022–23 financial year, 5,360 foreign buyers purchased properties worth $4.9 billion, a substantial increase from the previous year’s 4,228 purchases totaling $3.9 billion.

Despite these increases, foreign buyers only make up around 1 percent of all property purchases in Australia, which amount to over $407 billion annually.

The majority of these transactions (78.2 percent) involve properties priced under $1 million, indicating a trend of foreign buyers opting for more affordable homes, often in suburban or developing areas.

China remains the top foreign buyer, followed by Hong Kong, India, Vietnam, and Taiwan.

Debate Surrounding Foreign Investment in Real Estate

Despite the relatively low number of foreign buyers overall, their interest continues to generate political discussion.

Opposition Leader Peter Dutton has expressed concerns about foreign investment, particularly its impact on first-time Australian homebuyers.

Dutton has suggested a two-year ban on non-citizens purchasing existing residential properties in Australia, arguing that such a policy would give young Australians a fair chance to own their first homes.

“Imagine this: You work hard, save diligently, and finally have enough to buy your first home, only to be outbid by someone who doesn’t even live in this country,” Dutton stated in a social media post.

“If I become the next prime minister, I will push to ban foreign investors and temporary residents from buying existing homes for two years.”