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Research reveals importance of foreign investment
Posted on Friday, April 24 2015 at 11:54 AM
Data released today shows foreign investment is an essential ingredient in Australia’s property industry that helps drive new residential supply and ease pressure on housing affordability.
The ANZ/Property Council
Survey June quarter 2015 results
show relatively stable but significant levels of foreign investment are helping
bring new housing supply to market.
More
than 1850 survey respondents were asked what level of foreign purchasers
occurred in their newly constructed residential and non-residential projects.
The sentiment from the survey indicates that nationwide, foreign investment
accounts for about 22 per cent of new residential property sales, and this has
remained constant over the previous two quarters.
Property
Council of Australia chief executive Ken Morrison says the survey results
underscore the fundamental importance of foreign investment in making new
housing stock available for Australians.
“The
only way to improve housing affordability is to get more housing on the ground
earlier, and foreign investment is a key ingredient in making this happen,”
Morrison says.
“Foreign
investors don’t reduce the availability of housing for Australians, they
increase it.
“Every
newly constructed home that a foreign investor purchases enables up to four
other homes to be built.
“Foreign
investment provides the crucial early stage capital to get big new housing
developments over the line and into construction, delivering the twin benefits
of more jobs and more new homes.
“Our
research clearly establishes the critical link between foreign investment and
new housing supply.
“Big
new fees on foreign investors will act as a deterrent and without foreign
investment new projects will come online later or not at all.
“Introducing
a new stamp duty-like fee on foreign investors will actually diminish the
supply of housing, and the losers in this equation will be ordinary
Australians.
“There’s
a striking correlation in the data between those states with high confidence
and solid forward expectations and those that record solid levels of foreign
investment, like NSW and Victoria.
“Continued
foreign investment in new housing supply is a critical element to ensuring we
meet demand and keep pressure off house prices.”
ANZ
chief economist Warren Hogan says foreign investment is playing a key role in
boosting housing construction.
“Low
interest rates, increasing home prices and solid population gains, look to be
buoying expectations of increased housing construction activity in the coming
year, according to the ANZ/Property Council
Survey.
“In
addition to the positive impact of these housing market conditions, solid
foreign investment in new housing has also continued to drive a strong upturn
in housing construction.”
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