Foreign buyers are helping ease Australia’s housing shortage, with offshore investment spurring on higher-than-expected home development levels.
A report to be released today by property consultants RP Data and the Property Council of Australia forecasts further strengthening of the housing market, with 180,000 new homes expected to be built by June next year.
This is about 30,000 higher than average of recent years and about 10,000 ahead of forecasts six months ago, said Nick Proud, executive director of the Residential Development Council.
Mr Proud said the increase in foreign buyers, who now make up about 8 per cent of new home buyers, would push the construction of up to 14,000 extra homes this year.
Higher levels of construction were needed as Australia’s housing market begins to tighten.
"On average, Australia builds 150,000 homes each year, but this is simply not enough to meet demand, let alone reduce the housing shortage," Mr Proud said.
"These increased construction rates are expected to continue for the next 12 to 18 months — but the challenge is to keep up this level of activity to meet undersupply."
Building approvals in the year to June, at 193,667, were at a 30-year high.
Local developers are noticing the change. Meriton Apartments founder Harry Triguboff said a surge in demand from offshore Chinese-based buyers in the past three years had given the group more confidence that its projects would stack up financially.
"They are different from our purchasers because they are consistent buyers," Mr Triguboff said.
"They don’t wait for the market to come up or come down they just decide and they come and they buy. That makes it very easy for any developer because then he knows he has a buyer who is there all the time."
David Milton, CBRE’s managing director of residential projects, said offshore buyers were a key factor in local apartment projects getting off the ground.
This article was first published in The Australian.