Just how much foreign money is contributing to rising property prices is a staple of dinner party conversations around the globe. Australians now have a near-official answer, and it’s less than most would think.
The Australian Treasury estimates that foreign demand for real estate increased prices in Sydney and Melbourne by no more than A$122 ($90) a quarter from July 2010 and March 2015, and possibly as little as A$80. That compares to an average increase in overall prices of about A$12,800 a quarter, according to a report released Friday by the Canberra-based Treasury.
“Only a small proportion of the strong property price growth over the study period can be attributed to foreign demand,” the working paper concluded.
Australian home prices have increased by more than 50 percent since 2008 in the nation’s largest cities. In recent years that’s been spurred by unprecedented monetary easing from the central bank and a growing population, although increasing amounts of Chinese money have entered the market at the same time. Australia approved A$24 billion of Chinese real estate investments in the year ended June 2015.
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