Singapore has bought almost $20 billion worth of Australian real estate in the last two years, eclipsing China By Jack Derwin
• Singapore is now the second-largest buyer of Australian real estate, only trailing the United States. • The city-state has spent nearly $20 billion worth in the last two years. • It has eclipsed China over the same period, led by investments from large developers and its sovereign wealth fund, GIC.
Known colloquially as the Little Red Dot, Singapore is well and truly punching above its weight when it comes to Australian real estate.
In the two years to July 2020, Singaporean investors bought up $19.3 billion worth of Australian property, according to the latest Foreign Investment Review Board (FIRB) data.
To put that in perspective, Singaporeans spent $6.1 billion more over that period than China, despite its economy being around 44 times smaller.
It comes as Chinese investment actually declines, according to Georg Chmiel, co-founder and chair of Asian real estate platform Juwai IQI.
“Singaporean real estate investment has climbed significantly, while China’s has fallen,” he told Business Insider Australia. “Most big Chinese corporate investors have pulled back from Australia, while those from Singapore have doubled down on the lucky country.”
It sees Singapore make up 17 cents of every foreign dollar spent on local property versus just 13 cents from China. In fact, the country of just 5.7 million people spent more on local real estate than any other country with the exception of the United States.
Having almost doubled in the last three years, the capital flowing into Australia has largely been spearheaded by institutional investors funding large-scale projects.
“Singaporean real estate investment is being led by large investors such as the city-state’s sovereign wealth fund, GIC, but individual home buyers are also active in Aussie home markets,” Chmiel said.
“Singaporean developers are also helping bring their buyers from the Lion City to Australia. One example is luxury boutique developer Jean Yip Holdings. Their Perth project, Elements at Carousel, quickly sold out, and 60% of the units were purchased by buyers from Singapore.”
Within short flying distance to Perth and other capital cities, Chmiel said Australia remains a “natural destination” for Singaporeans, with property investment likely to only rise further as travel begins to reopen. At the same time, the reprioritisation of foreign investor visas by the Morrison government may encourage further home buying.
Yet Singapore’s interests go far beyond shop fronts and development sites. Across all industries, Singapore now represents the third-biggest source of foreign investment for Australia, trailing only the U.S. and Japan. Again, it leads far larger countries like Canada, the United Kingdom and China on that front, with major spending on agriculture, fishing and forestry, as well as the finance and insurance sector.
It marks an interesting recent change as China trends down from its historical highs.
Zooming out to the last 10 years, China remains by far the largest investor in Australia, having spent round $126 billion since 2010. Singapore by comparison has spent around 44 cents on the dollar over the same period.
As the trade relationship continues to languish, Chinese foreign investment may still have some way to fall yet.
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