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Australia’s reopening unlikely to immediately bring foreign buyers to residential property market

  • ‘For residential property, it won’t be an immediate shift,’ says Savills Australia executive
  • Industries such as tourism and hospitality will, however, be boosted immediately

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As of June, Sydney was the world’s top prime property market, with prices rising 10 per cent, according to Knight Frank. Photo: Xinhua
Cheryl Arcibal
A planned reopening of its borders is unlikely to have foreigners rushing back to Australian residential property, giving locals some space to cope with soaring home prices, analysts said.
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Last week, Canberra announced that it was aiming to reopen its international borders by Christmas at the latest, raising hopes that foreigners would finally be able to visit Down Under. That this could potentially lead to a deluge of foreigners snapping up homes in Australia was unlikely, according to analysts.

“For residential property, it won’t be an immediate shift. We should see migration return gradually, which will add fuel to the fire for the existing boom that housing is currently experiencing,” said Chris Orr, director, residential at Savills Australia.

Home prices in Australia have been surging, which prompted the International Monetary Fund to urge Canberra last week to cool the market, as a property price bubble could pose a risk to its economy, according to a report by The Sydney Morning Herald. So far this year, home prices have risen to a 32-year high of 18.4 per cent, while wages have risen by a mere 1.7 per cent.

As of June, Sydney was the world’s top prime property market, with prices rising 10 per cent, according to Knight Frank. The city’s rise to the top comes despite the Covid-19 pandemic, various property cooling measures Australia has imposed in recent years, and a deepening rift between Beijing and Canberra that is perceived to have turned Chinese buyers off Australian property.

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In another study by Knight Frank last month, five Australian cities – Perth, Gold Coast, Sydney, Brisbane and Melbourne – placed in the top 30 of an index tracking 46 prime global cities, with property prices in these cities rising between 3.6 per cent and 8.1 per cent from a year ago.

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