Investors may soon find themselves with fewer reasons to buy established property and more incentives to look towards the new apartment market.

Proposed changes to negative gearing and capital gains tax concessions would see new and off-the-plan apartments retain access to the tax benefits, while established properties would miss out, creating a clear advantage for buyers purchasing newly built housing.

The policy direction aligns with what many developers have been saying for several years. Australia needs more housing supply, and governments are increasingly looking for ways to encourage investment into new stock rather than existing homes.

The challenge for investors is that suitable product is becoming harder to find.

For much of the last decade, one-bedroom apartments were the cornerstone of investor demand. They offered a lower entry price, strong rental appeal, and were a common feature across most apartment developments.

Today, the development pipeline looks very different.

Across both New South Wales and South East Queensland, developers are increasingly targeting owner-occupiers and downsizers, delivering larger two, three and four-bedroom apartments in response to changing buyer preferences. While one-bedroom apartments still exist, they now form a much smaller portion of many new projects.

That shift has created a shortage of investor-friendly stock, particularly in well-located projects close to transport, employment hubs and lifestyle amenity.

At the same time, rising apartment prices have pushed many new developments beyond the reach of traditional investors. On the Gold Coast and across South East Queensland, it's becoming increasingly difficult to find new apartments priced around the $1 million mark, particularly those offering strong rental fundamentals and long-term growth prospects.

We've rounded up four new apartment developments where investors can still secure a foothold in the market for around $1 million or less.

<h2 data-end="1140" data-start="844">Flourish Soleira</h2>

<h2>Priced from: $1.07 million</h2>

Popular Palm Beach developer Sherpa is soon to officially launch its newest local apartment development, Flourish Soleira.

The one-bedroom apartments in the building were only offered to first home buyers rather than investors, and all of those have been snapped up. The two-bedroom apartments will start from $1.07 million, and the three-bedrooms, still a good investment given the popularity of Palm Beach for owner-occupiers, starting at $2,045,000.

&nbsp;

[smartcode_project:default project_id=150017 project_image_fid=370964]

Flourish Soliera will comprise 153 apartments across two buildings, connected by a skybridge, the first ever delivered in the suburb.

True to Sherpa's booming Flourish brand of apartment projects, Flourish Soleira will have extensive rooftop amenity across both buildings including a&nbsp;wellness centre with gym, work from home, yoga, pilates, a&nbsp;heated pool, private dining rooms, pizza oven and barbecues, basketball court, and golf simulator.

<h2>Corallo, Palm Beach</h2>

Priced from: $841,500

Nearby Flourish Soleira is Changfa Group's beachfront-inspired Corallo development. They still have some one-bedroom apartments remaining, priced from $841,500.

The 105-apartment project on Palm Beach Avenue is otherwise dominated by larger two and three-bedroom residences, many of which are aimed at owner-occupiers and downsizers.

[smartcode_project:default project_id=112194 project_image_fid=808]

For investors, the appeal lies in Palm Beach's continued transformation from a laid-back beachside suburb into one of the Gold Coast's most sought-after residential markets. Residents at Corallo will be within walking distance of Palm Beach's surf beaches, the recreational amenity of Tallebudgera Creek, and the increasingly popular collection of cafes, restaurants and boutique retailers along the suburb's central dining precinct.

<h2>Corner House, Stones Corner</h2>

<h2>Priced from: $880,000</h2>

One of only two Brisbane apartment developments to make the list with prices under $1 million is DeMartini Fletcher's Corner House development in Stones Corner.

One-bedroom apartments start from $880,000 within the 88-apartment development, providing investors with exposure to one of Brisbane's most established inner-south locations.

[smartcode_project:default project_id=149098 project_image_fid=330594]

Stones Corner has long been supported by strong tenant demand due to its proximity to major employment and education destinations. The suburb sits less than five kilometres from Brisbane's CBD and is within easy reach of the Princess Alexandra Hospital, Greenslopes Private Hospital, Queensland Children's Hospital and several university campuses.

The project's location within a walkable urban village environment, surrounded by retail, dining and public transport infrastructure, continues to attract both professionals and healthcare workers seeking accommodation close to work.

Parkdrive Apartments, Chermside

Priced from: $749,000

The most affordable apartments across Brisbane's new and off the plan market are in Chermside where developer AusDev is selling one-bedroom apartments from $749,000, and two-beds from $929,000, at its recently launched Parkdrive development.

The development is strategically positioned in one of Brisbane's largest employment and retail precincts, placing residents within easy walking distance of Westfield Chermside, The Prince Charles Hospital, St Vincent's Private Hospital Northside and the suburb's major bus interchange.

[smartcode_project:default project_id=152125 project_image_fid=363782]

Already under construction and scheduled for completion in early 2028, Parkdrive benefits from Chermside's ongoing evolution into Brisbane's northern metropolitan centre. The suburb continues to attract significant public and private investment, supporting population growth and underpinning long-term rental demand.

For investors focused on yield and tenant depth, the combination of healthcare, retail and transport infrastructure within close proximity provides a strong foundation for occupancy and rental performance.

Joel Robinson

Investors to turn to new apartments after Federal Government changes spark hunt for Queensland's best $1 million apartments

A mix of Gold Coast locals, fly-in, fly-out purchasers from Sydney and Melbourne, and Brisbane-based families has driven early sales success at Broadbeach's newest apartment tower, Lumara.

The 26-level project, a joint venture between builder-developer 5Point Projects and Bourke Projects, comprises just 37 luxury residences and is attracting a buyer profile that is looking for exclusivity, above the most amenity-rich suburb on the Gold Coast.

[smartcode_project:default project_id=150454 project_image_fid=364156]

Jamie Bourke, Director of Bourke Projects, says every buyer secured so far intends to use Lumara as a lock-up-and-leave residence, combining holiday use with the ability to work remotely when required.

“The size of the apartments, both half- and full-floor options, and the different zones within the floorplans, lends itself perfectly to dedicated home office setups and multi-generational family holidays,” Bourke says.

That flexibility has become a key drawcard for affluent buyers seeking a second residence on the Gold Coast without sacrificing the ability to conduct business away from their primary home base.

The absence of holiday letting within the building has also resonated strongly with purchasers.

“This type of buyer doesn't need to generate holiday rental income,” Bourke says. “They're paying for exclusivity, privacy and certainty around who their neighbours are.”

[smartcode_project:default project_id=150454 project_image_fid=366491]

The strong demand comes amid broader shifts in the high-end apartment market following the Federal Budget announcements in May.

“We were already seeing strong enquiry from high-net-worth buyers, but that has only accelerated since the policy changes,” Bourke says.

“A lot of those buyers are looking to place more capital into premium lifestyle assets rather than investment-grade stock that has been targeted by the Federal Government.”

[smartcode_project:default project_id=150454 project_image_fid=366486]

Designed by Cottee Parker, Lumara adopts a slender, sculpted form with an emphasis on natural materials suited to its beachfront setting. The architectural approach draws on coastal influences, with a palette of stone, timber and concrete selected for durability and the ability to weather over time.

Apartments are limited to three and four-bedroom configurations, with a maximum of two residences per floor through the mid-levels and a selection of full-floor and dual-level homes in the upper levels. All apartments are oriented to the north to maximise natural light, cross-ventilation and views across the ocean, city skyline and hinterland.

A two-level amenity offering is positioned high within the building on levels 20 and 21, conceived as a sky wellness retreat. Facilities include a magnesium pool, spa, sauna and steam rooms, alongside more social spaces such as a private dining room, resident lounge, workspaces and outdoor barbecue areas integrated with landscaped greenery.

The uppermost levels are reserved for larger-format residences, including several full-floor homes and a dual-level penthouse with its own private wellness features and recreational spaces.

&nbsp;

To give buyers confidence, 5Point and Bourke commenced construction ahead of the apartments launching to the market, a sure-fire way to prove they mean business, and the building will be delivered. They are targeting a 2028 completion date.

[smartcode_project_cta:default project_id=150454]

Locals, interstate holiday makers, drive early sales at Lumara, Broadbeach's newest luxury apartment tower

Often when it comes to purchasing property, the biggest barrier to entry is the deposit. Buyers of established homes typically aim for a 20 per cent deposit to avoid the added cost of Lenders Mortgage Insurance, while most property transactions require around a 10 per cent deposit when contracts are exchanged.

The off-the-plan market works differently, with buyers typically paying a deposit during construction and settling the balance upon completion. As completion approaches at <a href="https://www.apartments.com.au/new-apartments/fabbrica-fitzroy-369-gore-street-fitzroy-vic-3065">Fabbrica Fitzroy</a>, developer <a href="https://www.apartments.com.au/developers/pace-development-group">Pace</a> is making it easier for buyers to secure a residence through a deposit-matching incentive. Purchasers need only contribute a five per cent deposit*, with Pace matching the remaining five per cent.

The offer comes as Pace unveils a completed display apartment and townhouse, now available for inspection by appointment ahead of the project's Spring completion.

[smartcode_project:default project_id=139552 project_image_fid=371009]

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/winwood-mckenzie-architecture">Winwood Mckenzie</a> and landscaping by <a href="https://www.apartments.com.au/landscape-architect/acre">Acre</a>, Fabbrica draws on Fitzroy’s industrial and manufacturing history, incorporating references to the former Argyle Shirt Factory and Life Savers Confectionery Company that once occupied the site.

The development comprises 85 residences, spanning low-maintenance apartments through to larger-format townhouses with private street access and double lock-up garages, a relatively uncommon offering in Fitzroy’s higher-density apartment market.

Pace says the project has been designed to appeal to buyers seeking inner-city convenience without sacrificing space, flexibility, or amenity.

[smartcode_project:default project_id=139552 project_image_fid=371016]

Inside the residences, Winwood Mckenzie has focused on adaptable layouts and integrated detailing, with features including custom joinery, and concealed storage solutions. The material palette leans into warm, tactile finishes intended to complement the building’s industrial architectural language.

Fabbrica’s rooftop amenity is a key part of the project offering. Spanning around 800 sqm, the communal rooftop includes a private dining room, communal kitchen, lounge spaces, work-from-home zones, and outdoor dining areas overlooking the Melbourne CBD skyline.

[smartcode_project:default project_id=139552 project_image_fid=371017]

Landscape architecture studio Acre has introduced a layered rooftop garden designed to soften the urban setting while creating a more communal environment for residents.

The Fitzroy location also positions residents within walking distance of Brunswick Street, Smith Street, parks, cafés, galleries, and public transport, while remaining only minutes from Melbourne’s CBD. The project has an enviable Walk Score of 96.

[smartcode_project:default project_id=139552 project_image_fid=371025]

Pace, which is also delivering the project as builder, has developed more than 100 projects across Melbourne over the past three decades. The vertically integrated approach has become increasingly common among developers seeking greater control over construction delivery amid broader market pressures affecting the apartment sector.

The strikingly contemporary Gore Street development is now around 70 per cent complete, with purchasers expected to move into their new homes in Spring 2026. A limited number of residences remain available under the current deposit match offer.

*Conditions apply in relation to the deposit match offer.

[smartcode_project_cta:default project_id=139552]

Pace offers five per cent deposit match at Fabbrica Fitzroy ahead of Spring completion

Sydney developer Hyecorp's roots on the Lower North Shore stretch back three generations, and that deep understanding of the market continues to shape where and how it develops today.

From high-rise towers to boutique apartment projects, the family-run developer has built its reputation by focusing on a part of Sydney it knows intimately. Founded by Michael Abolakian in the early 1990s, Hyecorp is now led by his sons Stephen, Troy and Patrick.

Stephen Abolakian, joint managing director alongside Troy, has spent more than two decades in the business, overseeing development, planning, finance, marketing and sales.

Abolakian says the developer's disciplined focus on where it chooses to operate has been, and continues to be, one of Hyecorp's greatest strengths.

“We know the buyer profile exceptionally well,” Abolakian says.

“The demographics between places like Willoughby, Chatswood, St Leonards and Roseville are very similar. There are nuances between suburbs and projects, but culturally and from a buyer perspective, there’s a strong overlap.”

That buyer has historically been overwhelmingly owner-occupier driven.

Unlike many Sydney apartment developers that have traditionally relied heavily on investor demand, Hyecorp’s projects have typically attracted downsizers, upsizers, rightsizers and family owner-occupiers seeking long-term homes rather than short-term investments.

“Historically, investors have been a much smaller portion of our demand profile,” Abolakian says.

“We design for owner-occupiers. We don’t design for yield, we design for comfort, amenity, family living and long-term usability.”

That philosophy extends well beyond apartment layouts.

From landscaping and communal gardens to shared amenities and circulation spaces, Hyecorp’s developments are designed around how people actually live, something Abolakian believes has become increasingly important in Sydney’s apartment market.

“There was probably a period where having an approved project in market was enough,” he says.

“There wasn’t as much competition and if you built it, buyers would come. That’s no longer the case.”

“There’s more supply in the pipeline now, particularly with TOD precincts and low and mid-rise reforms opening up opportunities across Sydney. Buyers have more choice, so if you get the product wrong, they’ll simply go elsewhere.”

[smartcode_project:default project_id=110379 project_image_fid=311393]

The shift has forced developers to become more sophisticated in how they approach apartment design, particularly as owner-occupier expectations continue to rise.

For Hyecorp, that means thinking beyond who the buyer is today and designing for who they may become in five or 10 years' time.

“People buying now often aren’t moving in for several years,” Abolakian says.

“You might have a young couple buying today, but by the time they move in they may have children, older children, or changing lifestyle needs. You’ve got to think about how families evolve.”

That thinking also shapes Hyecorp’s approach to amenity, which positions wellness at the forefront.

[smartcode_project:default project_id=149594 project_image_fid=362634]

While resort-style facilities have become increasingly common marketing tools across Sydney apartment developments, Abolakian says the challenge is ensuring amenities are genuinely usable and appropriate for the scale of the project.

“If amenities are done right, they can materially improve the living experience,” he says, adding however that if you&nbsp;overdo it or get it wrong, you can end up with facilities nobody uses that simply create ongoing strata costs.”

That balance is something Hyecorp is aiming to strike with projects like Roseville Avenue, one of the group's upcoming Lower North Shore developments, which Abolakian describes as bringing a resort-style living experience into a metropolitan setting.

“It’s about creating something that feels special without being excessive,” he says.

“Good gardens, quality apartments, thoughtful amenity. Creating that resort feeling in a metro location.”

<img alt="Hyecorp" data-entity-type="file" data-entity-uuid="13c4c0f3-b1b7-44cf-9344-0b3d1d07797a" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-02%20at%2012.14.57%E2%80%AFPM.png?VersionId=9OLWjyj2bYkDV35F78WJnyMSPfc2bJ2z" />

The focus on owner-occupier product comes as Sydney’s apartment market continues to navigate a difficult development environment.&nbsp;For Hyecorp, maintaining an in-house operating model across construction, sales, marketing and development management has become increasingly important in navigating that environment.

“We’ve always believed in keeping a lot of the process in-house,” Abolakian says.

“It creates efficiencies, but it also creates quality control. You can make faster decisions and ensure the end product stays aligned with the original vision.”

Despite the challenges, Abolakian believes demand for quality owner-occupier apartments across Sydney remains strong beneath the surface, particularly across established Lower North Shore suburbs where downsizers continue to seek new housing options close to existing communities.

“There are definitely people waiting,” he says.

“Once some of the broader uncertainty settles, whether that’s the global environment or some of the local economic noise, I think the right projects will perform very strongly.”

Hyecorp currently has three residential developments on the market across Sydney’s Lower North Shore.&nbsp;Audrey, St Leonards, positioned opposite Newlands Park, is nearing completion and preparing to welcome its first residents, with the project now almost sold out.

Hyecorp has also recently launched&nbsp;<a href="https://www.apartments.com.au/new-apartments/celine-chatswood-37-archer-street-chatswood-nsw-2067">Celine Chatswood</a>, an architectural tower, while continuing to deliver&nbsp;<a href="https://www.apartments.com.au/new-apartments/juliet-roseville-64-pacific-highway-roseville-nsw-2069">Juliet Roseville</a>, a more boutique scale of development with just 34 apartments.

Why Hyecorp continues to back Sydney's Lower North Shore apartment market

South East Queensland’s apartment market is entering a new phase defined by rising prices, constrained affordability, and mounting pressure on the construction pipeline, according to RPM Group’s latest SEQ Apartments &amp; Townhomes Market Report.

The May 2026 report highlights a widening divide between what buyers can afford and what developers can viably deliver, with detached house prices continuing to push more buyers toward apartments across Brisbane, the Gold Coast, and the Sunshine Coast.

RPM says Brisbane’s median house price has reached around $1.5 million, accelerating the shift toward higher-density housing as buyers are increasingly priced out of the detached market.

[smartcode_project:default project_id=135094 project_image_fid=356540]

Median unit prices rose across all three major SEQ markets in the March quarter. Brisbane City recorded the strongest annual growth, with median unit prices climbing 21 per cent to $862,000, while the Gold Coast reached the highest overall median at $950,000, up 17 per cent year-on-year. The Sunshine Coast followed at $870,000, representing annual growth of nine per cent.

RPM noted the affordability gap between houses and units remains significant, with detached homes commanding premiums of 67 per cent in Brisbane and 68 per cent on the Gold Coast relative to apartments.

The report suggests this price disparity is increasingly consolidating buyer demand within the apartment market, particularly among downsizers and owner-occupiers.

“Demand is real. Supply is moving. But they’re operating on different timelines and the gap between what’s being built and what buyers can afford is the defining tension in this market right now,” RPM Queensland and NSW Managing Directors Peter Neale and Clinton Trezise said in the report.

[smartcode_project:default project_id=150787 project_image_fid=366230]

While approvals and commencements are strengthening, RPM argues the delivery pipeline remains constrained by construction costs, labour shortages, and extended build timelines.

Apartment approvals across Queensland increased 86 per cent over the year to February 2026, reaching 12,682 approvals, the highest level recorded since 2016. Brisbane overtook the Gold Coast as the state’s most active apartment approval market, with nearly 5,000 apartments approved over the past 12 months.

Unit commencements also strengthened considerably, rising 48 per cent year-on-year to 5,453 commencements in the December 2025 quarter, the highest level since 2018.

However, RPM’s research found apartment delivery timeframes have expanded sharply compared to the previous cycle. Projects are now averaging around 30 months from approval to completion, compared to roughly 20 months a decade ago.

[smartcode_project:default project_id=143932 project_image_fid=367515]

The number of units under construction has climbed to approximately 31,530 dwellings, nearing the previous 2016 peak, though projects are remaining in the pipeline for considerably longer.

Construction costs continue to weigh heavily on feasibility. RPM found the average apartment construction cost in Greater Brisbane reached $630,000 per dwelling in 2025, exceeding both Sydney and Melbourne. Coastal Queensland markets, including the Gold Coast and Sunshine Coast, were even higher at an average of $817,418 per apartment due to the prevalence of larger premium product.

The report also points to increasing pressure from Olympic-related infrastructure spending ahead of Brisbane 2032, with labour competition expected to intensify over the next several years.

[smartcode_project:default project_id=150017 project_image_fid=370960]

ANZ Associate Director of Property Daniel Gradwell said the underlying demand drivers across South East Queensland remain strong, supported by interstate migration, downsizers, and population growth.

“The challenge is bringing enough supply to market to meet that demand, and nothing on the horizon makes that straightforward,” Gradwell said.

RPM’s analysis found the affordability challenge is becoming more pronounced in the new apartment market itself, with only three per cent of surveyed new apartments priced below $1 million.

Instead, the market is increasingly concentrated in higher price brackets, with the most common new apartment price band across SEQ sitting between $1.5 million and $1.75 million. Around half of all new apartment stock surveyed is priced below $2 million.

The report suggests developers are not necessarily avoiding lower price points by choice, but because current construction economics make delivering affordable apartments increasingly difficult at scale.

Rental conditions also remain tight across the region. Median rents for one-bedroom apartments rose 12 per cent in Brisbane over the past year to $580 per week, while Gold Coast one-bedroom rents increased nine per cent to $630.

Despite rising rents, RPM noted bond lodgements have generally trended downward over the past five years, indicating more apartments are being absorbed by owner-occupiers rather than retained as investor-held rental stock.

Looking ahead, RPM expects projects targeting the mid-market owner-occupier segment between $1.25 million and $2 million to remain the most viable part of the market, while premium projects in highly constrained coastal or riverfront locations continue to attract demand.

“Construction costs are rewriting the feasibility rulebook across Greater Brisbane, and with little relief in sight, only projects in the right price band, right location, and with presales secured early will make it through,” the report concludes.

SEQ apartment demand outpacing affordable supply as construction timelines stretch: RPM

Foreign Investment

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GUEST OBSERVER
As well as restricting supply to an already full rental market, the 50 percent foreign ownership restriction removes some of the competitive advantages overseas developers had over local developers.
Prior to this change coming into effect, overseas developers had a competitive advantage as they had no overseas sales limits whatsoever. Overseas developers using overseas banks could, if they so desired, have 100 percent foreign sales, with 100 pe cent en masse sales occurring overseas.
What Scott Morrison has done is even the playing field between local and overseas developers, with overseas developers now forced to generally work within the same FIRB sales metrics as local developers.
To commence a development, local banks require local developers to presell approximately 70 percent of the apartments in a development and impose a 25 percent Foreign Investment Review Board (FIRB) restriction on these presales. This means local developers require 52 percent local sales prior to construction commencing.
Once the developer has achieved financial close with a local bank, they are free to sell the rest overseas. Meaning, under a 25 per cent FIRB presales limit, local developers using local banks can develop buildings with circa 48 per cent foreign ownership.
Banks are always looking at the FIRB presales limit and whilst many current developments are at 25 percent, there is a more recent bank trend to constrict this further – more in the realm of 15 percent. If this is the case, then locally banked projects can end up with 40 percent foreign ownership.
It is also fair to say that overseas purchasers have settled better than local sales. Many pundits were nervous about large buildings settling this year, yet what we are seeing is that very few overseas purchasers are falling through when it comes to quality developments (just 1-2 percent in fact), even against Australian Prudential Regulation Authority’s (APRA) headwinds of overseas purchaser mortgage finance.
With the 50 percent FIRB restriction placed across the whole market, coupled with APRA’s new powers across non-bank lenders, it means that the metrics by which local and overseas developers, local and overseas banks, and local and overseas non-bank lenders are becoming converged.
As a flow on effect of the overseas sales metrics now being similar, this policy change will result in overseas developers using local banks and non-bank lenders more readily to avoid foreign exchange risk, again levelling the playing field.
Perhaps this new measure may even narrow the gap between what an overseas and local developer can pay for a site, which sets the market and ultimately gets passed onto the (local) consumer.
As an unintended consequence however, this change will further constrict supply to rental markets, thus driving rental and housing prices further out of reach of local first home owners and owner occupiers. It is only state planning ministers that can affect real change by encouraging the supply side of the housing economic supply/demand pendulum.
Andrew Hogan is a managing director of Point Polaris. He can be contacted <a href="https://www.pointpolaris.com.au/" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

How will the 50 percent foreign ownership limit affect developers? Andrew Hogan

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A new study has revealed Sydneysiders are harbouring deep-seated fears that the Australian property market is being driven by ‘super-rich’ Chinese investors.
Almost 900 Sydneysiders were asked about their perception of foreign investors in the real estate market in a study led by Dr Dallas Rogers, housing researcher for the University of Sydney’s School of Architecture, Design and Planning.
The results found that there remains a high level of public concern and discontent about foreign investment, with more than half of respondents believing that government regulation of foreign investment is ineffective.
There was a view that Chinese investors are ‘super-rich,’ as perceived by 58 percent of respondents.
Around 63 percent identified Chinese as the majority of Sydney investors, which is likely given Chinese investment is concentrated in Sydney and Melbourne but within particular suburbs.
“The recent federal budget saw the government come down hard on foreign investors, which demonstrates the dilemma that the government is facing as it attempts to manage foreign investment alongside a disenchanted Australian public,” Dr Rogers said.
“Historically there has always been cultural tension over land and home ownership in this country that began with the arrival of British settlers in the late 1700s, the Chinese gold rush in the 1850s, and the White Australia policy in the early 1900s.
“In the 2000s, we again face significant societal change due to economic, political and social forces from Asia which, given its proximity to Australia, is reshaping our cities. This is the first time we have sought the individual opinion of Australians on the ground about the impact they believe foreign investment is having in their communities.” More than 64 percent of respondents cited foreign investors as the main reason for driving up house prices, despite little data on the inflationary impact of foreign investment on property. 
This is in spite of National Australia Bank data in 2016 showing that Australian residents and investors still make up a greater proportion of real estate buyers in Australia, accounting for 52 percent of sales, while only 14 percent were foreign investors.
The other most cited triggers for driving prices were low interest rates (37 percent of respondents), planning (36 percent) and local residents/domestic investors (32 percent).
The real estate industry recognises that the sale of established properties plays a big role in shaping housing prices, but there are strict conditions placed on foreign investors. Foreign investors can buy new properties, but can only purchase established homes if they meet certain criteria, such as a property that will be used for foreign student accommodation.
Domestic residents and investors therefore still make up almost 60 percent of this market, compared to 8.6 percent who are foreign investors.
The study has followed a 2014 Australian Government Parliamentary Inquiry into individual foreign investment in residential real estate due to mounting public pressure.
“The skills and cultural contribution of migrants to Australian society are so often overlooked by an ingrained historical desire to achieve the great Australian dream of homeownership,” Dr Rogers concluded.
A full report has been published in the <a href="https://www.tandfonline.com/doi/full/10.1080/00049182.2017.1317050" target="_blank">Journal of the Australian Geographer</a>.
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j.ballantyne1990-6AQqhLzZaK

Australians' deep-seated fear of foreign investment in housing remains: Sydney University research

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Chinese investors dominated the list of foreign investment approvals for the financial year 2015-2016, with much of it in residential real estate, data from the Foreign Investment Review Board annual report shows.
Of the total $47.3 billion pledged by Chinese investors in Australia, real estate accounted for more than $31.9 billion, FIRB data showed.
The total investment figure is similar to the previous year’s $46.6 billion in approvals.
The value of approved investment rose to around $248 billion, an increase of over $55 billion on 2014-15, driven predominantly by increased investment in the real estate sector, the FIRB noted.
Chinese investment commitments were far higher than the second-placed US at nearly $31 billion, of which $8.2 billion was into real estate. The FIRB data comes at a time when the government has announced measures to crack down on overseas property investors to cool the hot property market, mainly in the east coast.
Investment in development assets, such as new dwellings, vacant land and redevelopment of existing residential property that increases the housing stock was 85.4 per cent of all residential approvals, the FIRB said.
Most of these were in NSW and Victoria, or more specifically Sydney and Melbourne. 
Residential real estate also accounted for the maximum number of foreign approvals by sector. In 2015-16, there were 40,149 approvals compared with 36,841 in 2014-15, FIRB data showed. Residential attracted commitments of $72.4 billion in the last financial year.
Approvals to buy established dwellings have fallen 36 per cent from 2014-15, after the Treasury cracked down on illegally owned properties by foreigners and forced many to sell.
These statistics, as well as an analysis from Treasury last year, show that foreign investment approvals and investments in residential property do not push up the price of housing.
"While Melbourne received more foreign investment approvals than Sydney, price growth in Sydney was much stronger than in Melbourne," the FIRB report says.
"Every Chinese dollar invested landed in the pocket of an Australian somewhere. Chinese investment translates directly into jobs, tax revenue, economic growth and new housing construction. There's nothing about it that any reasonable person can object to. Frankly, China has been a godsend for Australia these past 10 years," Chinese property group Juwai.com’s chief executive Charles Pittar was cited as saying by the Australian Financial Review.
High value commercial property approvals increased by more than $10 billion.
For the third year in a row, China was the largest source of approved investments and while the US was second, it was the largest investor in non-real estate sectors.
There were foreign interests in 13.6 per cent of agricultural land by area as at June 30 last year. The two biggest investors in agricultural assets are the UK and the US.
Among agricultural assets, Federal Treasurer Scott Morrison approved the sale of the Kidman cattle empire for around $380 million to the syndicate of mining magnate Gina Rinehart and a Chinese company after refusing earlier attempts by a majority Chinese consortium.
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jonathanchancellor-7SQnKwU6yx

Chinese continue to dominate foreign investment in real estate: FIRB data

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The Federal Budget may unveil a tax on properties owned by foreign investors who leave them vacant for a period of time, as part of measures to improve housing affordability.
The levy will be part of the conditions imposed by the Foreign Investment Review Board when overseas buyers are approved for Australian property purchases, Sky News reported.
The fee charged to foreign investors who leave their properties vacant could be as much as $5,000, and would be on top of the fees they pay per property depending on its value.
It said the revenue raised from the scheme would be redirected into the government's wider package of housing affordability measures.
FIRB charges for investment approval are currently $5,000 for properties worth less than $1 million and $10,000 for those over $1 million.
A separate report in The Australian said the spokesman for Treasurer Scott Morrison declined to comment on the new report.
The Australian Taxation Office is in the process of building a nationwide register of foreign-owned land, under the Foreign Investment Framework, to identify which land is owned by overseas nationals.
This could be compared with water usage levels, kept by each state, to determine which properties are sitting vacant.
Earlier this month, Labor unveiled new measures if it came to power that will include adopting a nationally consistent Vacant Residential Property Tax, as recently imposed by the Victorian government, to curb investors buying properties and leaving them vacant.
Labor will also double the fines imposed on foreign investors who illegally purchase residential real estate. 
The Victorian government has decided to impose a tax on homeowners who leave their properties vacant in a bid to make housing more affordable in and around Melbourne, taking a leaf out of Vancouver's Empty Homes Tax.
The <a href="/news/victoria-to-tax-owners-for-leaving-homes-vacant-as-it-tackles-housing-crisis">Vacant Residential Property Tax</a> will be levied at 1 percent, multiplied by the capital improved value of the taxable property. 
Vancouver last year introduced a tax on owners of unoccupied homes. 
University of NSW research suggests up to 90,000 properties are sitting empty, while in Melbourne figures have shown almost 20 per cent of investor-owned homes were empty.
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Foreigners who leave homes vacant could soon be taxed

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GUEST OBSERVER
The announcement by NSW Labor that in government they would lift surcharges for foreign investors on residential homes will slow down the supply of new homes.
Sydney needs more housing supply not less.
So Labor’s proposal to lift the stamp duty surcharge from 4 percent to 7 percent and to double the Land Tax surcharge for foreign investors will be a clear signal that these investors are not wanted. The result will be to minimise this sector of the market and to therefore reduce housing supply.
The Urban Taskforce believes that increasing supply is the key game changer that is needed to help with housing affordability and that this can be done by speeding up housing planning approvals and by minimising extra costs being put on developers by councils and state government agencies.
We recently asked our developer members for examples of where housing projects were stuck in the planning system and were surprised to get a list adding up to around 40,000 new homes that were in limbo.
These projects need to be speeded up to lift housing supply for Sydney. The Department of Planning says an average of 36,000 new homes a year is needed in Sydney over 20 years so in boom times we should be over 40,000 new homes a year. The best performance to-date has been 34,000 so clearly Sydney needs many more new homes.
It is concerning that in the media release by NSW Labor, Shadow Treasurer Ryan Park refers in a negative way to ‘developer mates’. The only industry that is going to provide the massive number of new homes needed for Sydney is the developers but they have to battle a slow and complex planning system and manage as a result holding costs that can reach $500,000 a month for large projects.
The Urban Taskforce is keen to be involved with all political parties in discussions on housing supply and affordability in a positive and constructive manner.
Chris Johnson is chief executive officer of property development industry group Urban Taskforce and can be contacted <a href="https://www.urbantaskforce.com.au/index.php?option=com_content&amp;view=article&amp;id=97&amp;Itemid=126#.Vdaart55dFI" target="_blank">here</a>.
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NSW Labor housing proposals will slow supply: Chris Johnson

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New figures showed foreign buyers account for 11 percent of all NSW property purchases.
Figures released under Freedom of Information laws from the NSW Office of State Revenue show that foreign nationals accounted for 11 percent of the 28,141 residential homes purchased in NSW from July to September last year.
Chinese purchased over 32 percent of the properties, followed by British and New Zealanders at 10 percent each and Indians at 6 percent. 
The figures came after the NSW government imposed a four percent surcharge on stamp duty for property purchases by foreigners along with a 0.75 percent land tax surcharge.
The NSW Opposition obtained the information and today called on the NSW government to raise property taxes for foreign buyers.
They suggest lifting the surcharge on stamp duty to 7 percent and lifting the annual land tax surcharge from the current level to1.5 percent which would bring NSW into line with the surcharges imposed by Victoria last year.
ALP leader Luke Foley said lifting property taxes on foreign investors would ease the pressure on first home buyers who the figures show now account for just 7.5 percent of total sales.
The Office of State Revenue figures show that foreigners now account for about 15 percent of the state duty paid in the period, much more than their share of purchases which suggests the stamp duty surcharge is raising considerable revenue.
The figures show buyers from Nepal and Malaysia (at 3 per cent) followed then purchasers from Korea, Vietnam, the US and Indonesia (2 per cent).
Over a three-month ­period last year, 2995 properties were sold to foreign buyers, raising $115 million in stamp duty. By comparison, $766 million in stamp duty was paid by Australian nationals in the same period, the Daily Telegraph reportedly exclusively.
Under the foreign duty surcharge at present, a buyer paying stamp duty on a property worth $2 million would have to pay $95,490 plus 4 per cent on the $2 million, which would be an extra $80,000.
 
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Chinese lead foreign buyers who snap up one in 10 NSW property sales

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Foreign investment played a key role in underpinning demand for new housing stock in 2016, according to CBRE’s latest report.
That said, overall levels of offshore capital for residential investment eased in 2016 from the very high levels experienced in 2015, the agency noted.
Higher stamp duties applicable to source local debt, tighter enforcement of monetary caps on Chinese capital outflows and general concerns about apartment oversupply contributed to softer foreign investment in 2016.
Foreign investment sales turnover for the Sydney development site market declined by 50% in the 12 months to June 2016.
Despite the slowdown, Australia remains an attractive long-term proposition for foreign investment.
Foreign buyers, although motivated by rental returns, value other factors such as political stability, personal safety, education and low air pollution when assessing investment locations and Australia ranks very highly on these measures.
<a href="https://www.propertyobserver.com.au/images/2017/02/16/Figure%2020.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/02/16/Figure%2020.jpg" alt="">
Although 2016 saw a combination of factors that could impede demand from foreign investors, we are not forecasting a material jump in settlement defaults for off-the-plan apartments.
Settlement default has traditionally been low in Australia (sub-2 percent).
A tougher lending environment makes it likely that settlement periods will be extended and some increase in default will occur.
But the emergence of new lenders absorbing foreign buyer debt demand and the substantial cost of default (i.e. forgoing deposits) will limit the number of buyers defaulting in settlement.
Furthermore, conditions in domestic labour markets are unlikely to deteriorate to the extent that settlement defaults will increase markedly amongst domestic buyers.
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Settlement defaults to increase from low occurance in OTP housing market: CBRE

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Foreign agribusinesses and investment groups will have to declare their permanent water assets with the Australian Taxation Office from next December.
The move to establish a water register was aimed to bring more clarity to debate about the sector’s asset owners.
In 2013, federal government figures suggested 13.7% (or 1808 gigalitres) of all water entitlements have some level of foreign ownership — up from about 8.5% in 2010.
Most significant water assets currently held by foreign investors are connected to irrigated production ventures, such as Singaporean agribusiness Olam’s almond plantations along the Murray River.
One of the most significant offshore investors, the big US water investor Summit Holdings Group sold out last year, selling its portfolio to local investment funds, including the new Aware Water investment group owned by former ports bosses Chris Corrigan and Peter Scanlon.
National Irrigators Council chief executive officer, Tom Chesson, told The Land that “misinformation was the enemy of good policy”, so more facts about who owned what would help the water industry.
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National water register to measure foreign agriculture ownership

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Asian investors have spent $8.2 billion on Australian hotel acquisitions over the past eight years.
They have been stealing the march on their domestic rivals according to CBRE Hotels’ research that shows that domestic purchasers spent just $3.2 billion on Australian hotel property over the same period.
The data is highlighted in CBRE’s latest Australian Hotels MarketView, which points to a substantial increase in transaction volumes in Q3 2016 after a subdued first half.
<img src="/images/2016/11/11/Untitled1.jpg" alt="">
CBRE Hotels national director Wayne Bunz said over $600 million in hotels had transacted in Q3 with all but $50 million having been acquired by Asian buyers.
“For the ninth year in a row, Asian investors are set to be the dominant players in the Australian hotel market,” Bunz said.
“Multi-disciplined Asian capital has long been drawn to Australia’s attractive yields, steady growth, transparent political/legal framework and liquidity and that interest shows no signs of abating, with Australia increasingly viewed as a safe haven for Asia Pacific capital.”
CBRE’s MarketView highlights that the majority of transactions in Q3 took placed in regional locations, with tropical North Queensland seeing the most activity.
This includes notable transactions such as the Novotel Oasis in Cairns, which sold to Shakespeare Property Group for $48 million, and the Rydges Esplanade Cairns, which sold for $40 million to Mulpha Group.
Bunz said the high level of buyer activity had led to a noticeable change in the yield spread for regional hotels.
“Owners are now able to receive a premium from potential buyers who wish to break into these markets,” he said, adding that high construction costs meant buying was the most financially viable option for entering regional locations.
Nationally, CBRE Hotel has a further $200 million in assets in due diligence, with the majority of the deals involving offshore buyers.
CBRE Hotels Research Manager, Benjamin Martin-Henry, said a key attraction for offshore investors was the current strength in the Australian hotel market, with occupancy rates, average daily rates and revenue per available room having all increased in the year September 2016 according to the latest figures from STR.
“The leisure markets continue to be the best performing cities across the country, with Cairns, the Gold Coast and Hobart posting strong performance growth over the past year,” Martin-Henry said.
“Sydney has also showed strong growth across all indicators and continues to be the strongest ‘non-leisure’ market.”
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Asian buyers check in to Australian hotel sector with $8.2bn in deals 

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Foreign investment has been a significant driver of Australia’s property market and in many ways a contributing factor to our strong economy, particularly over the past decade as China has boomed and its rising middle and upper class have looked for new ways to invest in a volatile international economy, according to McGrath's latest report.
Australia’s attractive lifestyle, clean air and food supply, political and economic stability, high quality education and health facilities, safe cities, a similar time zone and attractive property market has proven an irresistible combination for our northern neighbours.
According to the latest Foreign Investment Review Board (FIRB) data, $60.75 billion was invested in Australian residential real estate by foreign buyers in FY2015, up 75% on FY2014.
<a href="/images/2016/10/31/Foreign%20investment.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/31/Foreign%20investment.jpg" alt="">
By far, New South Wales and Victoria were the favoured destinations and for the third consecutive year, the lion’s share of investment came from China – and at record levels, too.
Chinese buyers invested $24.35 billion in residential and commercial real estate last year, almost double that of FY2014 and more than four times the investment of FY2013.
Clearly, Chinese appetite for Australian property is increasing, so what happens when governments – Australian and Chinese, tighten controls on foreign investment?
<a href="/images/2016/10/31/Top%2010.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/31/Top%2010.jpg" alt="">
In December 2015, the Australian Government introduced fees for foreign real estate acquisitions, starting at $5,000 for purchases below $1 million – which represents the majority of foreign real estate purchases.
In June 2016, the New South Wales Government introduced a 4% stamp duty surcharge for foreign buyers and a 0.75% land tax surcharge from 2017.
In July 2016, the Victorian Government raised their stamp duty surcharge for foreign purchasers from 3% to 7% and announced an increase in the absentee owner land tax surcharge from 0.5% to 1.5% from 2017.
<a href="/images/2016/10/31/Top%2010.2.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/31/Top%2010.2.jpg" alt="">
The Queensland Government also introduced a 3% stamp duty surcharge on foreign purchases in October 2016.
And there’s even more hurdles for foreign buyers to jump with Australian banks tightening their lending criteria and the Chinese Government limiting the amount of capital exiting the country.
While it’s too early for official numbers, anecdotal evidence from our agents suggests mainland Chinese investors have pulled back while Chinese clients already here continue to upgrade to new homes and purchase for investment.
The effect of the new fees won’t be fully realised for another 12-18 months but we think it will be largely limited to the new apartment market.
FIRB figures show about 80% of all foreign purchases are under $1 million – indicating that reduced Chinese demand and settlement defaults will hit the apartment sector most, with some impact also felt in the mid-priced house market too.
As Chinese investment slows down – at least in the short term, FIRB figures show increasing interest from other parts of Asia, primarily Singapore, Malaysia, Hong Kong and Thailand.
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We are also seeing an increase in investment from emerging economies such as India, Vietnam and Indonesia.
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