How to market Australian listings to foreign buyers ?
Overseas investors bought more than 10% of all new housing in Australia in the first quarter of 2017, and more than 7% of existing stock (established properties), according to new research from the National Australia Bank (NAB).
According to those figures, foreign buyers in Australia is a central topic for all Australian real estate agents, who can profit greatly from this market provided that they know how to address it.
Indeed, this market weighs $72.4 billion, according to the Foreign Investment Review Board annual report 2015–16, with New South Wales($20.7 billion) and Queensland ($16.9 billion) the next most popular states after Victoria. In terms of number of transactions, this is an impressive 40,149 properties sold to foreign buyers in 2015–16.
Let’s now tackle some myths, about the nationalities of foreign buyers (only Chinese?), the places they are interested in (only Victoria?), or the average price range of a transaction involving a foreign buyers (multi-million dollar properties?).
- Chinese buyers is a smaller market than non-Chinese buyers
The press mostly writes about Chinese buyers. However according to the NAB report, Chinese buyers do not represent more than 25% of the total sales to foreign buyers. In other terms, Americans, Canadians, Europeans, South-East Asians are a bigger market and represent 75% of sales to foreign buyers in Australia. This is why all Australian real estate agents should adopt a full international marketing strategy, and not just target Chinese buyers.
2. Foreign buyers are very active in all Australian states
No, Queensland and Victoria are not the only states attracting foreign buyers in Australia. The numbers from the National Australia Bank tell us that New South Wales ($20.7 billion) and Queensland ($16.9 billion) the next most popular states after Victoria, but also that Western Australia is quite strong too with over 5% of new homes and over 7% of established properties sold to foreign buyers. Nationwide, international buyers bought more than 10% of all new housing in Australia in the first quarter of 2017, and more than 7% of established properties, which shows also that new homes is not the only type of property foreign buyers are looking to buy.
3. Multi-million dollar homes is a small proportion of the market of foreign buyers in Australia
An impressive 53% of all property purchases made by foreign buyers last quarter were for apartments, with 30% for houses, and the remaining 17% were land for redevelopment. As you can see below, the vast majority of transactions concerned flats valued at $1 million or lower, putting foreign investors in the same market as local investors and first-home buyers. For example in Queensland, nearly one in two apartment sold to a foreign buyer was priced below A$ 500,000.
For houses, the NAB survey found that just 16% of foreign sales were for properties valued at $500,000 or lower. 40% were for properties valued between $500,000-$1 million, and 25% for those valued between $1–2 million.
How can Australian real estate actors get a share of this market of $72.6 billion ?
A complete international strategy includes offline and online efforts. We will here explain what LJ Hooker (see below) addresses foreign buyers offline and online:
- Offline: offices abroad, events, referrals.
Example: “In the last 12 months, LJ Hooker closed 41,692 residential property transactions worth a total of $21 billion making it one of the largest sales organisations in the region. LJ Hooker is also one of the largest property managers, managing 152,500 properties for investors with an asset value of totalling $90 billion”. LJ Hooker can partly rely on an offline strategy, leveraging the fact that it has 8,000 sales professionals, property managers and support team members in 730 franchised offices across Australia, New Zealand, Indonesia, Papua New Guinea, Vanuatu, and China.
- online: agency website, and listing on overseas leading real estate portals
Example: Quoting an article published on LJ Hooker website, “LJ Hooker has expanded its global reach for vendors by becoming the first Australian real estate network to partner with international portal aggregator, ListGlobally.
LJ Hooker has unveiled an agreement which pushes all residential listings to ListGlobally, tapping into more than 100 websites across 60 countries with a combined audience of 76 million buyers.
LJ Hooker Head of Technology Ryan Campbell said an extensive review of international offerings showed ListGlobally offered unmatched exposure and access to key and emerging markets.
“ListGlobally now strengthens our all-round digital marketing offering which includes all the major domestic portals, social media engagements and ljhooker.com.au, which is Australia’s most visited network site,” said Mr Campbell.
“From China to the United States, Singapore to Canada and scores of countries in between, ListGlobally will upload the properties of vendors whom list with LJ Hooker. It’s unprecedented exposure in the global marketplace.”
At ListGlobally, since 2008 we are focused on helping local agents target foreign buyers. For Australian listings, we have created a set network of property portals in the key countries (China, USA, Europe, South-East Asia) that you can see here, which generates for LJ Hooker offices leads not only from Chinese buyers but also Swiss, French, American, British, and many other nationalities which confirm what the figures above stated: in Australia, foreign buyers come from all around the globe.