PETALING JAYA: No material, near-term impact on ongoing and future launches by Malaysian developers with a presence in Australia is expected, following news that the Australian government will ban foreign investors from buying established or existing houses for two years.

This is supposedly as part of an election pitch to rein in increasing home prices.

CIMB Securities in a report said it noted that interest from foreign buyers of Australian properties have cooled over the last few months.

Based on National Australia Bank’s quarterly survey, the market share of foreign buyers in new Australian housing markets dipped for the third straight quarter to 6.8% in the third quarter of 2024 or 3Q24 (2Q24: 8.9%), falling in all states except Queensland.

“Within the existing housing market, the overall market share of foreign buyers inched up to 3.9% (2Q24: 3.7%); statewide, it grew in New South Wales (to 4.5%) and Queensland (3.5%), but was lower in Victoria (4.6%) and Western Australia (3.2%).”

It said on the whole, it does not expect the property tightening policy to have a material, near-term impact on ongoing and future launches by Malaysian developers with a presence in Australia, as the two-year ban applies only to foreign purchases of existing homes.

“On the contrary, it may prompt a shift in foreign buying interest towards primary property market offerings in Australia.

“However, we caution that this policy could still weigh on overall Australian property transaction volumes over the mid-to-longer term if the issue of unaffordable house prices escalates to a critical level.

“By removing foreign buyers from the existing or secondary housing market, a vital source of demand would be eliminated, potentially triggering a negative ripple effect across the broader property upgrading cycle,” CIMB Securities said.

It said for property developers within its coverage, UEM Sunrise Bhd and S P Setia Bhd have exposure to Australian properties.

“UEM Sunrise recently secured the planning permit approval for the Collingwood development in Melbourne in December 2024, while construction work for the Subiaco Oval development in Perth with a gross development value (GDV) of RM1.4bil (1.5% of the group’s total remaining GDV of RM91bil as of Oct 31, 2024) is slated to commence in 2026.”

It said S P Setia officially launched Atlas Melbourne in Victoria on Oct 5, 2024 (GDV: A$980mil or RM2.8bil) and has acquired two more property sites in Australia (a 6,500 sq m plot in Carlton, Melbourne, and another smaller site measuring 1,374 sq m in St. Leonards, Sydney).

CIMB Securities is maintaining its “neutral” rating on the property sector, with Mah Sing Group Bhd as its top pick.