The Australian government’s Foreign Investment Review Board (FIRB) this week published its annual report under the banner headline that.
With Chinese investment totalling AUD24 billion, that’s treble the level of real estate investment coming from the United States and six times more than was invested from Singapore. This represents a two-fold increase on the AUD12 billion recorded in the previous year, when China surpassed the US as the biggest investor in Australian real estate for the first time.
This comes at a time during which. The total value of all approved foreign real estate investments grew by 75% last year to reach a total of AUD97 billion. This precipitous rise means property now accounts for 50% of all foreign investment entering Australia.
The looming question however is whether this makes Australia more vulnerable to China’s growth slowdown. This is up for debate, however with China’s economy growing by 6.7% in the first quarter of 2016 – safely within the expected range –. The sheer size of China’s growing middle classes – many of whom are seeking stakes in safe haven offshore markets – is also expected to balance out the impact of any modest deceleration in growth.
Furthermore, while this data does not account for investment since July 2015, based on current activity,.
Where is China investing? Over 90% of investment was directed at New South Wales – predominantly Sydney. Victoria and Queensland,and Brisbane, accounted for just AUD1.2 billion and AUD240 million of Chinese investment respectively, so there is significant room for growth.
The context for this news is also worth considering, with these two markets forging even closer ties over recent months. Australian Prime Minister Malcolm Turnbull will follow in the footsteps of other world leaders this week as he takes the helm of the country’s largest trade mission to China. He’ll be joined by 1,000 prominent business executives in talks that will focus on increasing Australian trade with China, which in 2015 was worth AUD150 billion.