According to ABC.net.au, Chinese buyers are being blamed for the increasing home prices that is currently causing the affordability crisis. But it has been found out that offshore Chinese purchases in real estate are not as high as the public thinks it is. Based on the ABS data from Foreign Investment Review Board (FIRB) approval figures, the estimated Chinese residential real estate investment is only 2 percent of all residential real estate transactions in the Australia. It must be noted that Chinese investors need FIRB approval for their real estate purchases.
The 2% figure was derived by dividing the estimated Chinese investment volume in residential real estate by the total volume of residential real estate transactions. And based on FISB statistics, the estimated residential real estate investment by Chinese investors was $5.8 billion for the year 2013 through 2014. It is the same data reflected on the records of KPMG/University of Sydney (USYD) for actual Chinese investment in Australia. On the other hand, the total sales value of residential property in Australia for the same period was $258 billion according to the Australian Bureau of Statistics.
Moreover, according to ABC, it should be noted however that the $5.8 billion figure in residential property investment for 2013-2014 is merely an estimate because FIRB data only includes the total amount of approved real estate investment. It does not differentiate what percentage pertains to commercial real estate or what percentage belongs to residential. It was reported that the ratio of commercial real estate versus residential real estate is 53 to 47 for the said period. Therefore if they say that residential real estate investment totals $5.8billion then commercial real estate investment is $6.6 billion. Also, with such ration, the total Chinese Investment in both residential and commercial real estate would then be $12.4 billion. Lastly, it should also be noted that FIRB approval figures are higher if compared to actual investment data.
