Property Hunter Magazine August Issue 2014 | Page 53

RBA Welcomes Foreign Property Investors Perth Retail Headed for Bright Future

Foreign investors are not
pushing first home buyers out
of the property market, a central
banker says.
Rising house prices in the past
12 months have been driven
by low interest rates and a
growing population rather
than foreign investors, Reserve
Bank of Australia assistant
governor Christopher Kent told
a parliamentary inquiry.
Prices have grown across the
country, including cities or
pockets of cities that do not
typically attract foreign investors,
Dr Kent said.
“The information available
suggests that foreign residential
purchases have probably not
had a large direct effect on the
price of housing that is typically
purchased by first home buyers,”
Dr Kent told the hearing in
Sydney on Friday.
The inquiry into foreign
investment in residential real
estate has previously heard
first time buyers typically
buy established properties,
while foreign investors are
only allowed to buy newly
constructed property or off-theplan.
Graham Mirabito, the chief
executive of real estate
researchers RP Data, told the
hearing on Friday overseas
buyers are often looking for
different properties to those
sought by local first home
buyers.
“They’re looking at one to two
bedrooms max,” he said.
“The typical first homebuyer
would be seeking something

more substantial, probably with
a larger area, potentially not
right in the middle of the CBD.”
Dr Kent also said foreign
demand was concentrated in
high density apartments in inner
city Sydney and Melbourne,
close to universities.
It was possible foreign demand
was affecting prices in certain
segments of the market, but
it was hard to know what the
impact was, if any, Dr Kent said.
“My own sense is that it’s
probably had a marginal impact
but you just can’t say definitively
how much,” he said.
Mr Mirabito also said price
pressures from overseas
investors were localised, most
often in high density areas.
“From a macro or a national
scale it’s unsubstantial,” he said.
“If you look at Docklands or
Southbank in Melbourne, for
example, you’ll find there is
some price pressures being
caused by foreign buyers.”
The RBA was not concerned
about property price rises over
the past year, as supply was just
catching up to demand following
a period of slow construction,
relative to population growth, Dr
Kent said.
Concern would be raised if a
long, sharp spike in house prices
continued, but the growth rate
had already begun to slow, he
said.
Foreign investment supported
local construction, while
foreign-based developers added
competition and provided
access to alternative sources of
financing, Dr Kent added.

An influx of international retailers,
shopping centre upgrades, and the
rise of online shopping has kickstarted
Perth’s biggest retail overhaul in 50
years, a forum on Perth’s retail future
has heard this morning.
More than 300 attendees at the
Property Council of Australia breakfast
at the Hyatt Regency Perth were told
international traders still preferred
Perth’s two key malls on Hay Street
and Murray Street rather than urban
shopping centres — but that they
would soon make their way to the
suburbs.
Architects, shopping centre managers,
town planners and local government
representatives were among the
attendees.
Shopping centres would also move
from “retail boxes” to designer spaces
with dining and entertainment options,
starting with Ocean Keys Shopping
Centre in Clarkson.
The revamped Ocean Keys centre will
open later this year and include a new
dining precinct, a Target and 30 new
specialty stores.
Upgrades are also in the planning
stages for Garden City and Karrinyup
shopping centres.
The construction and delivery phase of
those projects should begin by 2016.
Zara, Top Shop and Williams-Sonoma
are leading the influx of international
retailers, with the new Zara’s first
Perth store to open in Booragoon next
month.
The retail overhaul comes at a time
when WA has emerged as one of the
biggest online shopping regions in
Australia, the attendees were told.

After the NT and ACT, WA had the third
highest spend per capita on online sales.
Panellist Jim Tsagalis, managing
director for Lease Equity, also said the
rise of hotel developments, emergence
of new food and beverage precincts,
new liquor licensing approvals, and the
simultaneous development of largescale projects were driving the retail
change.
Mr Tsagalis said the Elizabeth Quay
precinct, the Perth City Link, and a
Forrest Chase upgrade would continue
to attract international retails over
coming years.
“Over $2 billion will be spent on
shopping centre developments over
the next four years,” Property Council
of Australia WA president Joe Lenzo
said.
“That’s the kind of figure you hear for
the mining industry.”
Mr Lenzo said the lifting of restrictions
on shopping centre sizes had been the
catalyst for the transformation.
“[The retail landscape] is going to be
totally transformed,” Mr Lenzo said.
“We’ve been way behind the rest of
Australia; even our biggest shopping
centres don’t make the top 40.”
Mr Lenzo said in addition to the
international retailers already
announced, half a dozen others were
interested in Perth including major
Singapore retailers.
“Shopping centres will become true
destinations,” he said.
“You won’t go there only to shop — you
go there to be entertai