Foreign Capital Investment in the Australian Property Market for FY24

Australian property market buoyed by $10.52 billion of cross-border investment in FY24

The Australian property market remained optimistic during the financial year ending June 2024, with a total of c. $10.52 billion invested by overseas investors, according to new research from M3 Property.

The Foreign Capital Investment in the Australian Property Market for FY24 report details the changes in foreign funds flowing into and out of Australia’s property market during the last fiscal year. While overall investment in FY24 is down on the approximately $15 billion invested in FY23, the $10.52 billion result is still considered satisfactory, given the pressures of inflation, geopolitical instability and supply chain issues the global economy stared down over the same period.

Foreign investors represent a large volume of demand for the Australian property market, mainly because of their large funding pool and risk tolerance, with heavy investments in core and alternative assets. Investors from the USA, China and Singapore have traditionally injected the most funds into Australian real estate, however changes in FY24 saw the re-emergence of Japan as a powerful investment force.

Michael Coverdale, Managing Director, QLD at M3 Property said, “The year ending June 2024 was notable for the changes in the mix of overseas investment sources into Australia. While our real estate market remains solid, it’s not as robust when compared with previous financial years. We’re seeing significant offloading of assets from countries facing their own economic headwinds as well as small capital allocations because of liquidity reasons.”

However, a positive change for the local property market is expected in FY25, amidst shifts in macroeconomic conditions here and around the world. With an Australian exchange rate favourable to cross-border investors and likely changes to the Reserve Bank of Australia’s monetary policy, along with interest rates already being lowered by central banks overseas and the improved cost and availability of global capital, international investment is likely to flow into Australia more freely this financial year.

“All signs point to the debt and investment markets changing from a period of volatility to stability, and even growth, in a few of our core investment markets,” said Mr Coverdale. “This gives us some confidence that foreign investment will improve throughout FY25, most likely with a focus on retail, office and industrial asset classes, as the global economy steadily recovers from the less favourable conditions of previous years.”

Read more and view the full report below.

Foreign Investment Insight – December 2024