Foreign buyers are flooding back into Australia, with Melbourne and Queensland emerging as the hottest locations for overseas purchasers.
According to data from the Australian Tax Office (ATO), purchase transactions increased 26.8 per cent in the 2022-23 financial year.
In total, foreigners purchased 5360 homes worth $4.9 billion, up from 4228 purchases totalling $3.9 billion in 2021-22, and 5310 purchases totalling $4.2 billion in 2020-21.
Foreigners predominantly targeted new dwellings, which made up 49.3 per cent of transactions, followed by established dwellings at 34 per cent and 16.7 per cent for vacant land.
While foreigners also sold 1119 properties worth $1 billion during the same period of time.
The report found that the top state for foreign buyers was Victoria (Melbourne), followed by Queensland (Brisbane and the Gold Coast), NSW (Sydney), and South Australia (Adelaide).
This was followed by the Australian Capital Territory (Canberra), Western Australia (Perth), Tasmania (Hobart), and the Northern Territory (Darwin).
Luxury property worth more than $1 million accounted for 78 per cent of all transactions, up from 75 per cent the year prior.
Juwai IQI Co-Founder and Group Managing Director, Daniel Ho, said the data showed foreigners were back and targeting the East Coast.
“The 27 per cent increase in buying last year shows that overseas buyers were bouncing back after the travel slowdown during the pandemic,” Mr Ho said.
“The number of offshore buyers in NSW was flat, and actually decreased by 1 per cent, from 664 to 656.
“Meanwhile, the number of buyers in Queensland and Victoria jumped.”
Mr Ho said the number of buyers in Queensland climbed 17 per cent, while the number of buyers in Victoria jumped 32 per cent, by about a third.
“This is the second consecutive year that more foreign buyers purchased in Queensland than in NSW,” he said.
“One-fifth, or 1169, of all the buyers were millionaire buyers purchasing property worth at least $1 million.
“Foreign buyers paid an average price of $914,000, which is just below the overall average price across the country of $959,300 in the March quarter, according to the Australian Bureau of Statistics.”
Mr Ho said that while Queensland attracted more buyers overall, NSW attracted more millionaire buyers.
“Foreign buyers purchased 284 homes in NSW during the year that were worth at least $1 million, compared to only 200 in Queensland,” he said.
“Victoria got by far the most millionaire buyers, with 569 foreign buyer transactions worth over $1 million each.
Mr Ho said foreign buyers were from all different parts of the world, but it was Australia’s strong economy, good education system, and attractive lifestyle that appealed to them.
“None of the buyers whose transactions are in the report had Australian permanent residency or citizenship at the time,” he said.
“In many cases, these buyers paid 7 per cent or 8 per cent of the purchase price on stamp duty and tens of thousands of dollars, or more, on foreign buyer application fees.
“And once they own their property, at least until they become permanent residents or citizens, they will pay an additional land tax every year.”
He said people have been moving to Australia in record numbers, and that shows up in the foreign buyer reports.
“It’s not just Australia, because we see the same thing happening in the US, Canada, Europe, and the UK.
“There is a significant wave of post-Covid migration as people act on plans they had to put on hold during the pandemic.
“We also see it in Southeast Asian countries like Thailand, which have seen rapid intake of their golden visa programs since the pandemic.
“If the Australian government succeeds in reducing the number of foreign students and other migrants coming to the country, we can expect foreign buying to be affected.”
