PHOTO: Foreign buyers from the United States have led a 15.5 per cent surge in demand for Aussie homes. Photo: iStock

It seems not even a global pandemic will dampen foreign buyer interest in Australian real estate. The latest Foreign Investment Review Board annual report shows a surge in foreign buyer investment of 15.5 per cent, taking it to the highest level in three years.

The United States leads international buyer demand for property with $13 billion worth of investment, trailed by Singapore with $9.5 billion and mainland China in third place with $7.1 billion. However, China’s overall value rose to just shy of Singapore’s when combined with that of Hong Kong.

European interest in Australian real estate also rose, with Germany accounting for $3.68 billion in investment and France $2.4 billion. Canada was the fifth most popular source country for investment with $3.3 billion.

The $17.1 billion worth of foreign residential real estate investment in the 12 months to June last year was up from $14.8 billion a year earlier but remains almost half of what it was at the peak of foreign investment in the 2016-17 financial year at $30 billion.

Demand for established housing increased sharply, while demand for new dwellings was almost static, according to the FIRB annual report.

Executive chairman of Asia-wide real estate tech company Juwai IQI, Georg Chmiel, said Australia did relatively well last financial year amid the global gloom inflicted from COVID-19.

“When it comes to cross-border real estate buyers, Australia is now more attractive than ever. Only the closed borders and the inability of foreign students to attend Australia in person is holding back foreign residential investment.”

The report outlines how the jump in the value of foreign investment comes despite a six per cent drop in the number of approvals due to tightened credit restrictions in the buyers’ home countries, local state taxes and foreign resident stamp duty increases and foreign investment application fees.