FIRB confirms suspicions: foreigners building the houses Australians won't
The media is going nuts for the big number everyone's been waiting for: Chinese investors drop $12.4 billion on real estate (residential and non-residential). Sounds big right?
That is until you look at the total approved developments: $74.59 billion. The way it is broken down is a bit complicated and some of the properties are Foreign Investment Review Board (FIRB) approved for the developer without a country specified. On countries that we do know about ($43.7 billion), Chinese investors make up just 28.4% (Table 2.12). If you haven't worked it out, that means 71.6% of overseas-origin real estate investment comes from other countries.
The FIRB haven't broken down residential real estate by country of origin, but out of the $34.72 billion invested into residential real estate, $27.2 billion dollars was invested into building new stock (Table 2.8). That's 78%! In fact, looking from 2012-13 to 2013-14, purchases of existing housing stock only went up by $1.15 billion, while investment in new property went up by $16.4 billion. In essence, foreign investment is doing what Australians either can't or won't do: build the new housing stock we need.
You can find the full report here.
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