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FOREIGN developers have grabbed a 30 per cent share of Australia's apartment market, a trend not repeated since the Japanese office and hotel development boom in the late 1980s.
Overseas investors are behind 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 per cent, research by the property group CBRE finds.
About 40 per cent 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 per cent of all apartments being proposed or developed by foreign companies,'' a CBRE executive director, Kevin Stanley, said.
''Development activity in Australia involving foreign companies has reached levels not seen in more than two decades.''
Frasers Property, a major Singaporean investor in Sydney's Central Park project on the old CUB site in Chippendale, 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 on Lonsdale Street. Malaysian, Chinese, Korean and Indian developers are huge investors too.
The push into apartments follows huge foreign investment in commercial property. Asian money accounted for 51 per cent of all foreign investment in commercial property, and 19 per cent of all transactions, so far this year, CBRE says.
More foreign money is being spent in Melbourne's apartment market rather than in Sydney's because larger sites are available on the northern edge of the Victorian city.
However, of $1 billion foreigners spent on development sites since 2006, a greater proportion went on buying comparatively more expensive land in Sydney.
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 per cent of apartments to be sold off the plans before funding is considered, insiders say.
The sheer number of apartments being built has prompted concerns about oversupply.
However, many of the bigger projects in Sydney, Melbourne and the Gold Coast are staggered, so developers can adjust their delivery and limit the risk of oversupply, CBRE's research says.
Foreign developers are attracted to Australia because the cost of sites are at a low point in the cycle and the stable economy allowed them to move equity here and diversify their risk.
''Critically, it's providing a stimulus to the construction sector at a time when development activity is generally at a low level,'' Mr Stanley said.
Overseas investors are behind 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 per cent, research by the property group CBRE finds.
About 40 per cent 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 per cent of all apartments being proposed or developed by foreign companies,'' a CBRE executive director, Kevin Stanley, said.
''Development activity in Australia involving foreign companies has reached levels not seen in more than two decades.''
Frasers Property, a major Singaporean investor in Sydney's Central Park project on the old CUB site in Chippendale, 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 on Lonsdale Street. Malaysian, Chinese, Korean and Indian developers are huge investors too.
The push into apartments follows huge foreign investment in commercial property. Asian money accounted for 51 per cent of all foreign investment in commercial property, and 19 per cent of all transactions, so far this year, CBRE says.
More foreign money is being spent in Melbourne's apartment market rather than in Sydney's because larger sites are available on the northern edge of the Victorian city.
However, of $1 billion foreigners spent on development sites since 2006, a greater proportion went on buying comparatively more expensive land in Sydney.
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 per cent of apartments to be sold off the plans before funding is considered, insiders say.
The sheer number of apartments being built has prompted concerns about oversupply.
However, many of the bigger projects in Sydney, Melbourne and the Gold Coast are staggered, so developers can adjust their delivery and limit the risk of oversupply, CBRE's research says.
Foreign developers are attracted to Australia because the cost of sites are at a low point in the cycle and the stable economy allowed them to move equity here and diversify their risk.
''Critically, it's providing a stimulus to the construction sector at a time when development activity is generally at a low level,'' Mr Stanley said.
