Interest from international buyers ticks up as borders reopen
Developers are hoping that migration will support new home sales over the next few years as international borders reopen.
The new home sector’s strong growth over the last two years has been driven by a property boom and COVID-19 stimulus measures such as HomeBuilder. But as the number of domestic buyers in the market begins to drop, developers have started to see international buyers – particularly from mainland China and Hong Kong – inquire and make purchases, The Australian reported.
Nathan Blackburne, managing director of developer Cedar Woods, said that 14% of inquiries last month came from overseas, with interest from New Zealand, Britain, Malaysia, China and Hong Kong.
“Pent-up demand from overseas buyers who want to come here and work or study is coming through following the lifting of restrictions,” Blackburne told The Australian. “By June, we expect the data to show a strong upswing in overseas buyer numbers.”
The federal government’s Centre for Population expects net overseas migration to recover strongly as border restrictions ease, returning to pre-pandemic trends by 2024-25 should the COVID-19 situation remain stable.
However, Housing Industry Association senior economist Nicholas Ward told The Australian that the true impact of migration likely won’t be clear for several years.
“Recent migrants typically access the rental market, predominantly apartments,” Ward said. “Typically, [they] will enter the detached market some years later – likely past the five-year point.”
However, with two years of border closures giving overseas buyers more time to research and the shortage of rental stock around the country, Blackburne said that timeline might be shorter in the coming years.
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Mirvac head of residential Stuart Penklis told The Australian that the number of offshore purchasers had risen since February, with many inquiring after larger, off-the-plan apartments that they hope to purchase before emigrating at a later time.
That’s a change from international purchases between 2013 and 2018, when one- and two-bedroom apartments were favoured by international buyers as investment purchases.
“The shift towards living in these high-amenity locations in larger apartments has occurred,” Penklis told The Australian. “Buyers are after larger apartments; they’re after the three- and four-bedroom apartments, and, as a business, we’ve never done more amalgamations than what we’ve done in the last 12 months.”
