Asian investors turn to fringes of Perth

Asian investors in Australia’s real estate are increasingly turning from central Perth to the city’s fringes.

Figures from Chinese-language property site Myfun.com shows that in the last six months, overseas buyers in Perth have moved from city apartments to suburban estates, with Piara Waters – 25km south of the CBD – proving the most popular area, followed by Two Rocks.

REA Group chief economist Nerida Conisbee told Perth Now that investors are broadening their view of Australian real estae: “There’s a bit of misconception that foreign investors are only interested in buying off-the-plan apartments. Under the foreign investment purchasing rules, they’re also allowed to buy new houses.

“What makes Perth unique is that the house-and-land product is such a big part of the market.”

“At the moment they realise Perth is at the bottom of the market, or close to bottom, and see it as value for money,” added Mark Hay, director of Mark Hay Realty.

Agents predict that the growing number of flights between China and Australia will encourage further investment in Perth’s property market.

Australian legal reforms unlikely to deter investors

6th January 2016

Australia introduced a wave of new laws on 1st December 2015 in response to growing concerns surrounding illegal overseas investment in the country’s real estate. The Foreign Investment Review Board now charges application fees to foreign buyers and has introduced penalties for those who do not invest legally in real estate. A land register has also been launched.

Investors in residential property will have to pay a fee of AUS$5,000 for a property worth up to $1 million and AUS$10,000 for a property worth over that threshold, with additional fees of AUS$10,000 for every increment of $1 million. Those who do not abide by the regulations, meanwhile, could face up to three years behind bars or a fine of up to AUS$135,000, with agents involved in their illegal transactions also subject to similar penalties.

However, investors appear not to be put off, says Catherine Wheeler, Partner at the Perth office of top Australian law firm HopgoodGanim.

“It is hard to say how much overseas property demand is likely to be affected by the recent FIRB changes – only time will tell, but in the past, these kinds of changes ultimately have a limited effect on demand,” she tells OPP.Today.

“Australia is still an attractive property market for overseas investors, so the changes (and the additional costs) would seem unlikely to deter serious investors/buyers.”

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