Australian Housing Market and the Indonesian Foreign Real Estate Investment

Offshore high net worth investors were active in the Australian property market subsequent to the Global Financial Crisis 2008. Indonesia is the direct neighbouring country to Australia and the bilateral investment between the two countries represents an important component of the Australia's foreign relation. Disproportionately the foreign direct investment from Indonesia has not been substantial compared to other neighbouring countries. In the midst of extensive media coverage on offshore investment in Australia housing market, both the number of wealthy Indonesians and their investments in the Australian housing market were allegedly on an increasing trend. This research intends to uncover the factors that influenced Indonesian investors' decision on the Australian residential property market investment by employing a qualitative semi-structured interview with various senior property professionals and investors from both Australia and Indonesia. Uncertainty in the Indonesian regulatory framework was the major "push" factors that resulted in overseas investment from Indonesia into the Australian residential property market due to favourable "pull" factors such as reputable living condition and stable macroeconomic environment. A better understanding on these drivers will assist the policy makers to better grasp the issue related to foreign real estate investment from Indonesia.