April 11, 2016 | CHINESE DOUBLE INVESTMENT IN LOCAL REAL ESTATE
The FIRB approved overall investment worth $194.6 billion in 2014-15, a 16.3% increase on the previous year’s result.
The increase was largely due to strong growth in the number of foreigners applying to purchase residential real estate, shows the latest annual report. Overall, proposed foreign investment in residential real estate increased from $34.7 billion in 2013-14, to $60.8 billion in 2014-15.
Chinese investors gained approval to spend $46.6 billion in the Australian economy in the 2014-15 financial year, almost twice the amount approved the previous year, according to the Foreign Investment Review Board’s latest annual report.
The real estate sector made up the lion’s share of Chinese approvals, with the FIRB approving Chinese real estate investments worth $24.3 billion in 2014-15, double the amount approved in 2013-14, and more than triple the level of 2012-13.
The majority of the real estate approvals were for new housing stock, which is in line with government policy aimed at channelling foreign investment into new housing.
Chinese investment in Australian real estate was three times that of second-largest investor, the United States. The United States had 7,103 applications approved in 2014-15, worth a total $7.1 billion. Chinese investment in Australian assets only exceeded the US’s for the first time last year.
The largest share of Chinese investment in Australian real estate was in Victoria.
The FIRB didn’t reject any proposals during the year, according to the report, but conditions were placed on 40% of approvals in line with the government’s tougher stance on foreign investment. One ‘divestment order’ was made in March 2015, when it became apparent that a Point Piper property was purchased illegally by a foreign company.
Approvals for foreign investment in finance and insurance businesses nearly tripled during the year, and approvals in the agriculture, forestry and fishing industries jumped 54%. Foreign investment in services and tourism declined.
The Real Estate Conversion