China is the biggest foreign purchaser of Australian real estate, spending $12.4 billion in 2013-14.
In 2012-13 China’s investment was just $5.9 billion, a report from the Foreign Investment Review Board Report (FIRB) shows.
For the first time, China is the main source of foreign investment, pushing the United States into second place.
China’s total investment last financial year was $27.7 billion, while the US were approved to invest $17.5 billion.
Canada is Australia’s third largest foreign investor ($15.4 billion) followed by Malaysia ($7.2 billion).
In 2010 the United Kingdom was the second biggest foreign investor in Australia, but is now ranks 12th.
The foreign appetite for Australian homes has centred on new dwellings, with total spend on off the plan apartments up from $5.73 billion to $16.4 billion.
The foreign spend on existing homes jumped almost $2 billion to $7.17 billion last financial year.
The statistics did not give a breakdown of the residential investments by country.
But the FIRB did reveal the number and value of property transactions almost doubled from 11,668 transaction to 23,054 in 2013-14.
The value of proposed investment in residential real estate increased to $34.7 billion, up from $17.2 billion.
Investment in newly developed homes was up 200% to $25.8 billion while investments in existing homes – that can only legally be bought by temporary residents in Australia – was up 32% to $7.17 billion, up almost $3 billion.
Commercial real estate investment also increased from $34.8 billion to $39.9 billion.
Investments in real estate accounted for almost half China’s total, with its $12.4 billion approved investment more than twice the amount of the Americans on real estate.
The FIRB figures tally approved investment rather than actual investment. While China has topped the US for annual approvals, the US, Great Britain and Japan still have greater accumulated investment in Australia than China.
The federal government is close to finalising proposed new fees for foreign investors buying Australian property which Treasurer Joe Hockey hopes will “restore confidence” in the foreign investment system which had not prosecuted anyone for breaching the rules since 2006.
This article was first published on Property Observer.