The Chinese are the highest number of foreign national investing in property in Australia, new data shows, despite higher fees for overseas buyers.

Residential and commercial property at 31.2% and 18.6% respectively, represented 49.8% of all proposed foreign investment in 2014/2015.

Overall proposed foreign investment in Australian residential and commercial property was up 30% to $96.9 billion in 2014/2015 and represented 49.8% of all investment approvals, according to the most up to date figures available.


According to the Foreign Investment Review Board (FIRB) annual report it approved a total of $194.6 billion worth of proposed investments across all industry sectors that fall within the scope of Australia's Foreign Investment Policy.

China's total property approvals reached $24.4 billion in 2014/2015, up 97% over the year, followed by the United States with $7.1 billion, Singapore with $3.9 billion, Malaysia with $3.4 billion and Korea with $2.5 billion.

The data also shows that total investment in developer off the plan property was $28.7 billion, almost double the previous year.

A large component of residential FIRB approvals in 2014/2015 included proposed investment in property for development totalling $49.3 billion.

Victoria was the top state for foreign investment in property with $20.6 billion approved, followed by New South Wales with $16.2 billion. Other significant approvals were in Queensland with $9.4 billion and Western Australia at $2 billion.

Michelle Ciesielski, head of residential research at international real estate firm Knight Frank, pointed out that non-residents in Australia are currently limited to purchasing new or off the plan (OTP) property with a fee payable on application to the FIRB.

Total investment in developer OTP property was $28.7 billion in 2014/2015, almost double the $16.4 billion over the previous year.

Proposed investment in new residential property for individuals rose 86% to reach $14.4 billion in Australia, which comprised of 20,551 approvals in 2014/2015. This was up significantly on 2012/2013 when investment approvals were $2.9 billion and 4,499 individual purchasers were approved.

As a comparison, over the financial year of 2014/2015, approvals for existing commercial property actually fell 10% to $28.5 billion.

Ciesielski also pointed out that changes to the rules for foreign investors in Australia means that since December 2015, all foreign investors must pay a fee before their foreign investment application will be processed and stricter penalties have been increased by the Australian Taxation Office for those who breach the rules.

Those buying property valued at $1 million or less pay a fee of $5,000 while for properties over $1 million it is $10,000 then a $10,000 incremental fee per additional $1 million in property value.

In the state of Victoria, including the capital city of Melbourne, this fee is in addition to the state based 3% duty payable on the purchase price, and the annual absentee tax of 0.5% on the property value for foreign owners who leave their property vacant for extended periods throughout the year.