Foreign Investment Hits A 2.5 Year Low
The number of foreign purchases for residential property has dropped to a 2.5 year low according to the National Australia Bank.
There seems to be a big shift in the market by foreign investors. The percentage of sales has come down quite drastically during this period.
Over the past month, two of our major banks have changed their lending policies to foreign investors. Here are some of the changes when applying for a loan;
- Insisting on untranslated original documentation
- Tightened passport scrutiny
- Applicants must show all pages of their passport
- Applicants with 100% foreign income will not be accepted
Now that two of the major banks have made these changes, don’t be surprised if the other lenders follow suit.
Foreign buyers of new properties now account for 11.8%. That is a substantial drop from its peak of 16.8% in September 2014. Here is what the numbers look like for the two biggest states;
- NSW down from 21% to 11.1% in the past 12 months
- VIC down from 32.5% to 10.7% since December 2014
Foreign buyers in Victoria and NSW accounted for about one in 10 new property sales in the March quarter, but in Queensland they purchased more than one in 5 new properties, NAB said.