SINGAPOREANS, among the main foreign investors in Australia's property market, tend to go for new apartments in major cities such as Sydney and Melbourne.
The director of EPS Property Search in Sydney, Mr Patrick Bright, who deals extensively with expatriate and foreign-based buyers, said Singaporeans regard the Australian market as 'cheap'. ?
'A really nice apartment with a harbour view in Sydney might cost A$2 million (S$2.6 million),' he told The Straits Times. 'The same apartment with a harbour view in Singapore could cost about three or four times as much. I am not saying Australian real estate is cheap. But compared with places like Singapore and Hong Kong, it is cheap.'
The Australian government does not publish the identities of foreign investors. But real estate agents consistently include Singaporeans among the top five nationalities, along with buyers from China, England, South Africa and Japan.
Foreign investment in Australian property increased after the 2009 financial crisis, which left the Australian economy relatively unscathed.
While the strength of the Australian dollar has discouraged investors from Europe and the United States, it has not deterred Asian investors because of the continued strength of their own currencies.
The Foreign Investment Review Board, which oversees approval for developers to sell to foreign investors, reported last November foreigners invested A$23.4 billion in its real estate assets, including 3,639 new and existing homes, and 988 parcels of land. 'We see a lot of interest from Singapore, Hong Kong, Tokyo and the UK,' Real Estate Buyers' Agents Association of Australia president Byron Rose told The Daily Telegraph. 'They know the market is depressed and they are making huge capital gains and are reinvesting in the market.'
In 2008, the government briefly allowed temporary residents to buy properties while in Australia. But the move was believed to have led to a spike in prices and was scrapped last April. There were concerns that wealthy investors, mainly from China and South Korea, were buying properties through their children who were in Australia on student visas.Foreign investors are largely restricted to buying off-the-plan properties in developments approved by the Foreign Investment Review Board.
Mr Louis Christopher, managing director of property consultancy SQM Research, told The Straits Times that foreign investors need to be 'very, very careful' about buying such properties, which are often priced at a premium. 'The other risk is that the building is not completed according to specifications or to the agreed time,' he said.