Local property demand still strong among foreign investors
Interest in Australian property by foreign investors remains strong, according to HLB Mann Judd, despite high tax rates.
HLB Mann Judd Melbourne partner, Josh Chye, said Australia was seeing strong demand from investors in Singapore, Hong Kong and Malaysia while those from China had scaled back.
This was providing support for the property market despite rising interest rate and inflation concerns.
Chye said: “New enquiries from mainland Chinese investors have scaled back significantly but other parts of the Asia Pacific region, including Singapore and Hong Kong, are consistently strong and Australia remains an attractive jurisdiction despite the relatively high taxation rates.
However, the rising prices and tax increases could make Australia less attractive in the future with investors looking elsewhere to Europe or the United States.
“We have higher than average tax costs for foreign buyers of real estate than our global neighbours, including on land tax. This has increased consistently over the past seven to 10 years at both the state and Federal level, and the additional impost is a burden for foreign investors in real estate.
“While the high tax rates are a consideration for many foreign buyers, this is balanced by the fact that Australia remains a stable jurisdiction for real estate investors. Price growth, particularly in Sydney and Melbourne, has also driven interest from foreign buyers.
“[But] if there continues to be a trend of continued tax increases or removing of tax concessions solely focused on foreign investors, this will no doubt hurt Australia’s reputation and standing as a stable jurisdiction for foreign investors into Australia and other markets such as the US, Canada and the United Kingdom will increasingly look more attractive as alternative destinations for real estate investments.”
AUTHOR
Laura Dew
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