Sydney, Australia (4E) – Australian home purchases by foreign buyers surged by an annual pace of 93 percent to a record 24.9bn Australian dollars ($23bn) in the nine-month period ended March 31, according to data by UBS AG.
Overseas investment in Australian housing now accounts for 13 percent of total turnover, compared with historical average of 8 percent, according to a UBS report dated June 27. The report also said that new properties represent around 78 percent of the purchases.
In the 12 months through May 31, home prices increased 10.7 percent to a median 545,000 Australian dollars across the country’s eight state and territory capitals, according to the home value index by RP Data-Rismark, amid record-low interest rates of 2.5 percent.
The Australian parliament is investigating into foreign buying of local real estate amid worries that overseas demand is raising prices and making housing unaffordable for domestic buyers.
The government tightened rules on real estate investment by foreigners in 2010, requiring offshore buyers to buy only new properties. Australia has also required temporary residents must obtain approval from the Foreign Investment Review Board to purchase homes, and must sell the property when leaving the country.