Foreign property investors are embracing Australia's real estate market.
In all, 24.3% of commercial property transactions in Australia last year involved foreign investors, which is the largest proportion in more than 20 years. Altogether last year, Australia commercial real estate deals totalled $12.7 billion.
The report shows that the current strength of the Australian dollar is not putting off investors, says the real estate consultants firm Jones Lang LaSalle.
Also highlighted in the report was news that Australian investors in offshore markets sold off more than $2.3 billion in assets as they re-weighted their portfolios.
“We are currently seeing buyer behavior trends reverting to what we saw back in the early 1990’s. At that time we experienced a recession, and this meant that domestic institutions and offshore investors became much more prominent. Looks like this is what’s happening now,” said JLL Australia’s David Rees.
Commercial property is attractive to overseas investors despite the strong dollar.
“The last few years have seen the biggest downturn in markets we’ve had since that time, and capital values have changed quite significantly. Real estate investments, especially commercial ones, always become more active when the market tightens.”
Rees went on to explain that the fact Australia’s real estate market is so transparent and well regulated is proving especially attractive to foreign buyers. The country’s proximity to Asia is another advantage.
“We could argue that the strong dollar is due to our strong economy. Though some people might say it deters people from investing, offshore buyers don’t seem to be buying that,” added Rees.
Source: Realy Biz News