Sydney is now so expensive foreigners are looking at other states to buy property – leading to more competition for real estate in other parts of Australia.
New Australian Taxation Office data released on Friday showed New South Wales was the only state where foreigners bought less real estate in 2022-23.
This occurred as every other state and territory saw double-digit increases for the combined tally of new dwellings, established dwellings and vacant land sold.
Foreigners spent an average of $914,000 on an Australian property during the last financial year, with overseas transactions up 27 per cent across Australia.
Sydney’s median house price of $1.4million is by far the most expensive among Australia’s capital city markets, with a property insider revealing foreigners are looking at other major cities as a result.
Sydney is now so expensive foreigners are looking at other states to buy property – leading to more competition for real estate in other parts of Australia
New Australian Taxation Office data released on Friday showed New South Wales was the only state where foreigners bought less real estate in 2022-23 (pictured are prospective buyers in Sydney)
Foreigners, and not just Australians, are now regarding it as increasingly unaffordable with NSW seeing a 1 per cent fall to 656 foreign transactions in 2022-23, the tax office data showed.
Peter Li, the general manager of the Plus Agency that handles $200million annually in Australian property sales to overseas Asian buyers, said high prices in Sydney meant foreigners were looking elsewhere in Australia.
‘High prices in Sydney do drive some buyers to other states,’ he told Daily Mail Australia.
‘Remember that, in addition to the high prices, they also have to pay significant stamp duty and then land tax.’
By comparison, Victoria is proving particularly popular with 2,240 transactions – up 32 per cent – with most of the activity concentrated in Melbourne where the mid-point house price is $937,289.
Queensland saw a 17 per cent increase with foreigners mainly buying property on the Gold Coast and Brisbane, where the mid-point of $937,479 has made it Australia’s second most expensive state capital city market.
Juwai IQI co-founder and managing director Daniel Ho said while Queensland had more foreign buyers, NSW and Victoria were attracting more foreign millionaires.
‘They appreciate Australia’s strong economy, good education system, and attractive lifestyle,’ he said.
Western Australia, however, saw the biggest increase among the states of 46 per cent – to 322 foreign transactions.
Perth’s median house price surged by 22.2 per cent in the year to $769,691, CoreLogic data showed.
South Australia had a 40 per cent increase, equating to 459 foreign transactions, in a state where Adelaide’s mid-point house price is $811,059.
Tasmania had a 25 per cent increase, leading to 138 foreign transactions where Hobart’s mid-point house price is $697,770.
Peter Li, the general manager of the Plus Agency that handles $200million annually in Australian property sales to overseas Asian buyers, said high prices in Sydney meant foreigners were looking elsewhere in Australia
The Australian Capital Territory saw a 79 per cent surge to 369 foreign transactions, where Canberra’s median house price is $961,403.
Property buyers who don’t live in Australia as a permanent resident need to obtain Foreign Investment Review Board approval to buy any home, whether it’s new or established.
Exemptions are only granted for foreigners to buy an existing property if they can prove they will be living in it as their main place of residence or will redevelop the property.
Mr Li said foreigners were increasingly buying land to avoid having to pay stamp duty on an established house.
‘House and land packages are a way for foreign buyers to save on stamp duty,’ he said.
‘You only pay stamp duty on the land, and not on the construction price of the house.
‘So for a $1 million house, you might save 50 per cent of your stamp duty compared to a place that has already been built.
‘That’s especially important for foreign buyers who are also paying additional stamp duty, on top of the same stamp duty everyone else pays.’