Apartment development driven by international investors
Overseas developers have grabbed a 30% share of Australia’s apartment market including 13,000 apartments in 37 projects in Australia.
Based on the average number of apartments completed in 2011, that represents a market share of as much as 32%, research by the property group CBRE finds.
About 40 % of projects are under construction; the rest are at the planning or marketing stage.
”Asian developers, predominantly from Singapore, are leading the pack, accounting for 92% of all apartments being proposed or developed by foreign companies,” CBRE executive director, Kevin Stanley, said. ”Development activity in Australia involving foreign companies has reached levels not seen in more than two decades.”
Singapore’s Frasers Property is one of the largest foreign investors, accounting for 2900 apartments. The second-biggest investor is Hong Kong’s Far East Consortium, which is building 2600 apartments in Melbourne’s billion-dollar Upper West Side project.
Local developers are now under pressure from foreign developers who can source funds from overseas financiers and then sell unlimited numbers of apartments, under revised foreign investment rules. Many local developers are struggling to comply with onerous bank restrictions, after the global financial crisis, that require in some cases up to 100% of apartments to be sold off the plans before funding is considered, insiders say.
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