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Foreign buyer demand has fallen to its lowest level in two and a half years, in both new and established property markets, in the first quarter of 2016.
According to NAB’s latest Residential Property Index, foreign buyers accounted for 11.8 per cent of total new property sales in the first quarter of 2016, down from 14.4 per cent in the fourth quarter of 2015.
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Foreign buyers accounted for just 7.2 per cent in established property markets during the first quarter of 2016, a decrease from 8.6 per cent in the fourth quarter of 2015.
“Their market share of property sales in both new and established housing markets has been falling since the final quarter of 2015, which coincides with the introduction of tighter legislation around foreign purchases of Australian property,” NAB chief economist Alan Oster said.
The Index found that in new property markets, foreign buyers fell to 10.7 per cent in Victoria over the quarter, compared to 16.4 per cent in Q4 in 2015 – its lowest level in two years and significantly below the high level of 32.5 per cent in the fourth quarter of 2014.
In NSW, foreign buyer demand for new property dropped to 11.1 per cent, while in Western Australia foreign buyer demand fell to just 2.9 per cent over the quarter.
However, the share of foreign buyers in new property markets in Queensland continued to rise, increasing to 21.9 per cent in the first quarter, from 20.9 per cent in the final quarter of 2015.
In established property markets, foreign buyer demand accounted for just 7.1 per cent in Victoria, 7.8 per cent in NSW and 6.7 per cent in Queensland.
In contrast, foreign buyer demand for established property increased in Western Australia to 8.8 per cent during the quarter.
The Index also revealed the type of property purchased by foreign buyers.
Overall, 51 per cent of all foreign residential property purchases were for apartments, 31 per cent for houses and 18 per cent for redevelopment properties.
The price range of property purchased by foreign buyers was also recorded in the Index, revealing approximately 31 per cent of apartments purchases by foreign buyers were valued at less than $500,000.
Forty per cent were valued between $500,000 to $1 million, while just over 16 per cent were in the $1 million to $2 million range and 7.9 per cent were in the $2 million to $5 million range.
Just 5.5 per cent of foreign purchased apartments were valued above $5 million.
[Related: Bouris tips broker market share to skyrocket]
