Overseas investors have been flocking to Australia, resulting in an “unprecedented”60 per cent surge in capital entering the commercial property market.
Foreign buyers have spent $5.9 billion in the last financial year, according to Savills Australia. In the preceding 12 months, the amount spent was $3.5 billion.
Sixty seven per cent of the off-shore investors were based in Asia. North Americans and Europeans accounted for 18 and 15 per cent of the market, respectively.
Over the past 12 months, activity has been described as being “off the charts” as investors have considered their options and decided they like what they see in the Australian commercial market.
The country’s reputation for economic and political stability has been a big draw for international investors, according to Savills’national head of research, Tony Crabb.
Investors may have found that conditions in their home countries are not attractive in terms of returns.
If interest rates are below those offered in Australia and political and economic conditions are not as stable, property investment markets may not be as attractive. To maintain growth, companies, investors, and developers are turning to overseas markets for new opportunities.
Most foreign buyers are focusing on the office markets (84 per cent), while14 per cent are buying retail space and two percent of transactions are in the industrial market. Asian investors bought approximately two-thirds of the properties in the office markets. Foreign investors accounted for close to half of the CBD office market transactions in the last year.
