Other data suggest a much smaller decline in foreign buying than the FIRB data. The ANZ-Property Council Survey shows a sustained but gradual fall in the presence of foreign buyers since the peak about two years ago.
Nationwide, just 11,000 approvals were granted by FIRB in 2016-17, down from 40,000 the previous year. The scale of decline was similar across each of the states, with approvals in New South Wales, Victoria and Queensland all falling 65 per cent to 70 per cent year on year.
Victoria is still the most attractive market for foreign buyers on the basis of the FIRB data, recording 40 per cent of all approvals, followed by New South Wales (30 per cent) and Queensland (20 per cent).
The FIRB believes “the most significant factor explaining this drop is the introduction of application fees in December 2015”. The fees mean from the end of 2015 onwards, it has been in the interest of potential foreign buyers to only apply for approval when they are likely to purchase.
Still, these data do not tell us how many approvals are converted into purchases of property. The headline FIRB data therefore do not tell us much about the actual activity of foreign buyers.
In order to assess movements in foreign-buyer activity, we refer to the quarterly ANZ-PCA survey.
Respondents report the share of property sales to foreign buyers has steadily declined from its peak around two years ago.
The June 2018 survey suggests nationwide 16 per cent of property sales were to foreign buyers, down from 24 per cent in September 2016.
New South Wales (16 per cent down from 25 per cent) and Victoria (21 per cent down from 31 per cent) report similar declines over the same period.