Mainland Chinese investment in Australian real estate surged by 16% according to the latest data from the governmental Foreign Investment Review Board. 

Chinese invested AU$7.1 billion in Australian residential and commercial real estate in the year 2019-20, up from $6.1 billion a year earlier. Including Hong Kong, Chinese investment totalled $9.5 billion.

This year, Singaporean investors eclipsed those from China, Primarily due to the activity of large publicly traded companies and investment funds from the city state. Singaporean entities were approved to buy AU$9.5 billion of Australian real estate.

In total, foreigners from all nations were approved to buy $17.1 billion of residential real estate — up  15.5% from a year earlier. Commercial property investments worth $38.8 billion were also approved.

“Australia depends on foreign investment more than most countries,” said Juwai IQI Group Co-Founder and Executive Chairman Georg Chmiel. “Foreign investment flows average about 3.3% of Australian GDP, compared to 1.5% for countries in the G20. Of course, this dependence is especially great in the real estate sector because of the high investment required.

"Amid the global gloom of 2020, Australia did relatively well. Investment into Australia declined by only slightly more than total global cross-border investment.

"When it comes to cross-border real estate buyers, Australia is now more attractive than ever. Only the closed borders and the inability of foreign students to attend call in Australia in person is holding foreign residential investment back today."

Chmiel said that foreign investment into Australian residential real estate jumped by 15.5% to $17.1 billion. That is a surprising increase, given the difficult global environment in the first half of 2020.

"Residential real estate accounts for about 9% of the total value of foreign investment and 86% of all approved applications. More residential real estate investments were approved in Victoria than any other state, at 43% of the total. 

“New South Wales and Queensland tied for the second highest number of approved residential real estate investments — at 19% of the total. 

“This is a tremendous showing by Queensland, which is rapidly becoming a top destination for foreign investment. Queensland used to be a distance second, but now it's tied for second. Queensland has the advantage of lifestyle, less congestion and lower prices. New South Wales struggles with high home prices and even foreign buyers are sensitive to the high levels of unaffordability in many suburbs.”

Chmiel said, although the FIRB data only extends to June 2020, more recent data from Juwai IQI shows that Chinese buyer enquiries for Australian housing increased by 50% in the first quarter of 2021 compared to a year earlier.

“Chinese demand has been surprisingly resilient but we’re not sure the transactions are closing at quite the same rate. Chinese are already looking past the pandemic which in most of China no longer has much of an impact on daily life, except that it makes international travel very difficult.

“We expect transactions to climb relatively steeply once borders reopen next year.”

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