Australian property market to face challenges
While regulators and banks are working on solving the surge of Chinese investment into the country, new data suggest that the Australian residential property will not be slowing down anytime yet.
According to News.com, ANZ released a research note showing two charts the reveal more details about what Australians could expect.
The first chart comes from the Foreign Investment Review Board. The data breaks down foreign investment approvals by country. As what one would expect, the Chinese got the bulk of last year. More importantly, FIRB’s latest annual report also added that the value of approvals for foreign investment in Australian real estate bumped up to 75% in the previous financial year to around $61 billion.
Two-third of the applications were from the Chinese. The second chart discusses how the median Australian apartment price in Australian dollars performs compared to the median Australian apartment price in Chinese yuan.
According to the report, Australian buyers see apartment prices comparatively higher. Specifically, the lower the Australian dollar is then it means that it has fallen when it comes to Chinese buyers since 2011.
“The lower Australian dollar has supported foreign investor demand for Australian housing,” wrote ANZ’s analyst.
“Tighter lending conditions may see this ease.”
“We continue to expect that demand for housing will ease from here, driven by tighter lending standards, especially for property developers and foreign buyers,” ANZ wrote.
“Easing demand is expected to see price growth slow from here on. From a peak of 12.8 per cent year-on-year in September 2015 and 8.1 per cent currently, we expect national house prices to rise by 6.4 per cent and 1.7 per cent in 2016 and 2017 respectively,” ANZ added.
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