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Overseas interest in the Australian property market has continued to recover post-pandemic, according to property data service platform PropTrack.
In its most recent Overseas Search Report – October 2023 released on Thursday (26 October), PropTrack revealed since its July report, searches from abroad have continued to increase, with purchase searches up 11.5 per cent in the last three months and rent searches up 7.8 per cent.
The platform said both buy and rent searches were now “well above pre-pandemic levels” and were continuing to rise as the nation’s migration has returned to levels seen before the pandemic.
The report found rental searches from New Zealand were the strongest, having increased 38 per cent from last year, with the neighbour across the Tasman Sea having also increased their purchase searches, up 7 per cent on the previous year.
The report also revealed that searches for property from China had returned to pre-pandemic levels, having plummeted by 53 per cent in the 12 months to September 2020 due to the pandemic.
In the year to September 2023, PropTrack found that searches to purchase property from potential buyers based in China increased 37 per cent, while searches for rentals grew 25 per cent, levels which it said “are nearly double the volumes seen before the pandemic”.
It followed the Treasury’s Foreign Investment Quarterly Report, which was released last month and found that buyers from China made up the greatest percentage of foreign property buyers in the June quarter (1 April to 30 June 2023), with 826 investment proposals granted in the June quarter alone, up from 606.
The Treasury’s report also saw an increased number of approved proposals for investment in real estate by foreign buyers rise to $1.1 billion in the June quarter, up from $700 million the previous one.
PropTrack said the increase in rental searches, particularly from China (up 25 per cent), the United Kingdom (up 15 per cent), the United States (up 9 per cent) and New Zealand (up 38 per cent), coincided with increasing migration levels.
Karen Dellow, senior data analyst at PropTrack, stated: “Rental searches in particular are a leading indicator of overseas migration and have mirrored the trend of permanent and student arrivals to Australia, illustrating new arrivals’ relationship with the rental market.
“In July 2023, arrivals from migrant workers and students hit the highest level since January 2020, averaging 265,000 new arrivals each month over the past six months.
“At the beginning of 2022 when Australia’s international border reopened, the number of arrivals from overseas began increasing month on month, as did search volumes.
“Australia’s population grew by 1.9 per cent in 2022 – an increase of 496,800 over the 12 months, which was the biggest increase in 15 years.”
The increasing level of searches from foreign buyers and rising migration levels pose a potentially growing problem in regard to housing affordability in Australia, according to NAB chief economist Alan Oster.
Speaking during the NAB Commercial Broker Quarterly Economic Update webinar earlier this month, Mr Oster suggested that there needed to be more migration control and investment into public housing.
He stated: “I think in some ways, migration coming down will help, and number two, need to incentivise a lot of public housing.
“Hopefully, after a combination of less migration and a little bit more public housing, some of the infrastructure issues will pull back and allow purchase costs to come down within the building industry.”
Mr Oster’s views were similar to AMP chief economist Shane Oliver, who said the nation’s poor housing affordability problem was being exacerbated by booming immigration.
In AMP’s Insights report last month, Mr Oliver commented: “The role of high immigration levels (now about 500,000 per annum) can’t be ignored.
“On our estimates, it needs to be cut back to nearer 200,000 people a year to line up with building industry capacity and to reduce the supply shortfall.
“Our rough estimate is that if home building supply capacity is 200,000 dwellings a year (as we managed in the five years to 2022) then immigration levels need to be cut back to 260,000 from around 500,000 now.”
[Related: Public housing, migration control needed to address affordability: NAB]
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