Tiny Singapore Surpasses Giant China in Race to Acquire Overseas Real Estate in Some Markets: Juwai IQI

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China is by far the largest investor in Australian real estate over the past decade, but Singapore has surpassed it in the past two years.

Although tiny Singapore’s GDP is about 2.3% of the size of China’s US$14.7 trillion economy, investors from the much smaller nation invested about one-third more into Australian residential and commercial real estate in both the 2018-2019 and 2019-2020 financial years. We use the latest data from Australia’s Foreign Investment Review Board (“FIRB”) to illuminate the change and its implications.

During the two years between June 2018 and July 2020, Australia’s Foreign Investment Review Board approved Singaporean investors to acquire AU$19.3 billion of Australian real estate, while Chinese entities received approval for just AU$13.2 billion of such investment. The gap in Singapore’s favour was AU$6.1 billion.

Singapore’s approved Australian real estate investment only first reached $5 billion in 2016-17. It quickly jumped to AU$8 billion the following year and then rose to more than AU$9 billion in the two most recent years, 2018-19 and 2019-20. Today, at 17%, it accounts for a larger share of the total than at any other time on record.

On the contrary, China’s share of annual investment in Australian real estate ballooned between 2012 and 2018. Today, however, Chinese investment has fallen even as Singapore investment has climbed. China accounted for 26% of foreign real estate investment in Australia in 2015–16. Today, at 13% of the total, China’s share is still significant but below its recent peaks.

The makeup of the two countries’ investment flows are different.

Singaporean investment is weighted towards large-scale investors purchasing commercial property and development sites. Chinese investment is now predominantly individual buyers purchasing residential units.

Examples of Singaporean investors include Singapore’s sovereign wealth fund GIC, Singapore Press Holdings, and listed Singaporean developers Wing Tai and Wee Hur — all of which acquired significant Australian assets in 2019-2020.

Across all industries, and not just in real estate, Singapore is the third-largest source of proposed investment in Australia by value in 2019–20. It follows the United States and Japan and leads Canada and the United Kingdom. China is sixth.

Over the past decade or so, China is still by far the largest investor in aggregate. Chinese approved investments total about AU$126 billion since 2009-10. That’s more than double the AU$56 billion invested by Singaporeans during the same time.

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