Increased overseas interest in Australian residential property, driven by a weak local currency, is set to drive up house prices in the county even more this year, experts suggest.
According to Savanth Sebastian, an economist at CommSec: “Australia’s starting to look a lot more attractive from a foreign investment perspective with the falling currency and that will probably show up more in the property market than anywhere else.
“It [foreign property purchases] will be more prevalent, especially with an improving global risk appetite,” he added.
Neil Smoli, the Managing Director of property investment specialists Aviate, agrees that a weakening currency is a factor that is enticing more foreign buyers into the Australian property market.
“The influence of foreign investors purchasing residential property in Australia is having an increasingly pronounced impact. The relatively simple path for overseas investors to purchase property in Australia can be expected to come under further scrutiny, particularly given the falling number of first home buyers in the market at the moment,” he said.
Non-residents of Australia can currently obtain newly-built residential properties in Oz, providing they receive permission from the Foreign Investment Review Board first.
Figures released by RP Data last week show that property prices across Australia rose by close to a record 10 per cent last year, with Sydney’s property market the main driver of this growth, experiencing average price rises of around 15 per cent.
The average price of a house in Australia’s largest city is now AUS$655,250.
The smallest price rises recorded in any Australian state or territory capital cities last year were seen in Hobart and Adelaide, where prices increased by just 2.2 per cent and 2.8 per cent respectively.
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Article published 6th January 2014