Despite the COVID-19 pandemic having restricted and reduced the physical movement of Asian real estate buyers around the world, it has not dampened enthusiasm for overseas real estate.
A new report on Asian foreign residential property investment shows Australia is currently the second most popular offshore destination for Asian buyers, with only the United States attracting more interest.
According to the Asian Investment in Australia report from Juwai IQI, Australia accounts for 13.7 per cent of international activity from Asian investors.
Although COVID-19 led to a 19.2 per cent decline in Chinese real estate buyer inquiries in 2020, six times as much mainland Chinese investment flows into the Australian real estate market from China than into housing in the US.
Despite the downturn in Chinese investors in Australia, buyers from Singapore, Malaysia, and Japan all increased activity in Australia in 2020 regardless of the COVID-19 pandemic.
According to the report, which was sponsored by Melbourne premium real estate firm Kay & Burton, Asian communities overseas are watching Australia closely and there are a variety of positive reasons why they view Australia favourably.
Several push factors in Asian domestic markets have driven buyers to look overseas and these include restrictions on buyers in Tier 1 Chinese cities, as well as a shortage of inventory and a lack of confidence in some local markets.
A significant number of buyers also postponed transactions during the pandemic and are now eager to make up for lost time.
The disruption caused by the pandemic has caused many Asian buyers to re-evaluate their real estate priorities and according to Jamie Mi, Partner & Head of International Division at Kay & Burton, Asian communities are watching the Australian market closely.
“There are many positive reasons they like Australia, including education, the stable political environment, and how we are handling COVID-19 thus far,” Ms Mi said.
Another factor driving the popularity of Australian real estate among Asian investors is price growth, which has created demand for property, as buyers fear missing out and seek to capitalise on future gains.
Melbourne remains the top Australian location for inquiries from prospective Asian buyers, followed by Sydney and Brisbane. Hobart is now the fourth most-popular city for potential investors, followed by Adelaide, Perth, the Gold Coast, Canberra, and Cairns, with Darwin rounding out the top 10.
Ms Mi said she expected inbound investment in the Australian market to rebound from the second half of 2021, with an apparent acceleration in the number of applications for Significant Investor Visas.
“Next year, there will be plenty of buyers coming in and plenty of offshore wealth invested in Australia,” she said.
“It will be Asian buyers, and also buyers from the US and UK and expats.”