Foreign investment trends in the October 2022 quarter, and their implications

Samy Mansour, David Landy, Andrew Hay and Mariam Azzo
22 Mar 2023
Time to read: 3 minutes

Foreign investment in Australia remains stable – while there has been a reduction in the number of investment proposals, the value of those investments has increased.

Treasury has released its second quarterly report (for the period 1 October 2022 to 31 December 2022) (Q2) on foreign investment in Australia. This quarterly report illustrates key trends in foreign investment and compares the most recent data with the data captured within the first quarterly report for July 2022.

This article provides an analysis of the comparative data; the trends captured within the July 2022 quarter (Q1) report are available here.

The quarterly reports were published because the evaluation of the 2021 foreign investment reforms found that enhanced performance reporting would improve the transparency of foreign investment regulation in Australia. The next quarterly report will be published in May 2023.

Who's investing in Australia?

Consistent with the results for 2020-2021 and 2021-2022, and the July 2022 quarter, the United States was again the top source for commercial investment (being all investments, other than residential real estate) into Australia for the quarter ($16.7 billion). This is a 45% increase from the $11.5 billion of approved commercial investments flowing from the United States in the previous quarter.

China had the second highest value of approved commercial investments ($6.7 billion, a 294% increase from the previous quarter), followed by Singapore ($5.2 billion, an 8% increase from the previous quarter), and South Korea ($4.2 billion, a 950% increase from the previous quarter).

The order of countries with the highest value of approved commercial investments in Australia changed slightly but the countries investing in Australia were substantially the same as Q1.

Investment sources Q1 July 2022 quarter

United States ($11.5b)

Canada ($6.7b)

Singapore ($4.8)

China ($1.7b)

UK ($1.1b)

Japan ($0.8b)

South Korea ($0.4b)

Spain ($0.2b)

Czech Republic ($0.1b)

Qatar ($0.0b)

Investment sources Q2 October 2022 quarter 

United States ($16.7b)

China ($6.7b)

Singapore ($5.2b)

South Korea ($4.2b)

Canada ($3.8b)

Spain ($1.7b)

UK ($0.7b)

Qatar ($0.6b)

Czech Republic ($0.6b)

Japan ($0.6b)

Total Q1 + Q2

United States ($28.2b)

Canada ($10.5b)

Singapore ($10.0b)

China ($8.4b)

South Korea ($4.6b)

Spain ($1.9b)

UK ($1.8b)

Japan ($1.4b)

Czech Republic ($0.7b)

Qatar ($0.6b)


The value of commercial investment proposals approved in the October 2022 Quarter was $58.7 billion (Q1: $48.6bn), an increase of $10.1 billion compared to the previous quarter. This is also an increase on the quarterly average value of commercial investments for the 2020-21 financial year ($56.8 billion), but still significantly less than the quarterly average for the 2021-22 financial year ($82.6 billion).

What sectors are attracting foreign investment?

Consistent with Q1, commercial real estate was the most popular industry sector by value in Q2, with a total value of $19.3 billion. Approved investments within the finance and insurance industry grew by 130% in approved value from last quarter to $12.9 billion – the sector attracting the second largest amount of foreign investment by value for Q2. Meanwhile, approved investments within the manufacturing, electricity & gas industry rose by 139% in approved value to $12.9 billion in Q2 – the third highest investment amount by total. The following sectors also featured: services (Q2:$7.5bn; Q1:$14.8bn), agriculture, forestry and fishing (Q2:$4.4 bn; Q1:$1.6bn), mineral exploration & development (Q2:$1.7 bn;Q1: 6.0bn) and residential real estate (Q2:$1.4 bn;Q1:$2.9bn).

Therefore, there have been decreases in investment in services, mineral exploration & development and residential real estate.

Approved investments

337 commercial investment proposals were approved in Q2. This was a decrease in approvals from the previous quarter (404 approvals), and is less than the quarterly average numbers for 2021-2022 (391 approvals) and 2020-2021 (581 approvals).

Of the 337 commercial investment proposals approved in Q2, 127 were approved with conditions, whereas 198 out of 404 proposals were approved with conditions in Q1. By value, almost 75% of investment approvals ($43.7 billion out of $58.7 billion) had conditions imposed on them for the quarter (against approximately 73% for Q1).

Withdrawn applications

36 commercial investment proposals were withdrawn in Q2 (a proportion of approximately 10%). This percentage proportion is similar to Q1.

National security applications

Out of the 337 commercial foreign investment proposals in Q2, the Treasury approved 28 applications which related to national security actions (19 mandatory, 8 voluntary and 1 combined application) that would not have been captured prior to January 2021 when the changes relating to notifiable national security actions took effect. In Q2, there were 9 less national security applications compared to Q1.

Processing times

In Q2, 38 days was the median processing time for approved commercial proposals. This was a decrease from the median processing time of 44 days in Q1, 52 days in 2021-2022 and 51 days in 2020-2021 – with 34% of proposals were considered in 30 days or less, an increase compared to the 26% in Q1. Furthermore, a further 38% of approvals were considered in 31 to 60 days. As such, in Q1, 72% of investment proposals were processed within 60 days compared to 68% in Q1 – compared to 59% in 2021-22 and 57% in 2020-21. So processing times appear to be improving.

The October 2022 quarterly report attributed the decrease in median processing times to continuing improvements in efficiency within Treasury.

Key takeaways for future foreign investment in Australia

Some general trends investors should take away from these statistics include:

  • foreign investment in Australia remains stable – while there has been a reduction in the number of investment proposals, the value of those investments has increased, particularly in Q1 and Q2 from countries like the United States, Canada, Singapore, South Korea and China; and
  • processing times for proposals continue to decrease, but the majority of approvals still exceed the statutory period for review.

If you would like to know more about how your foreign investment application could be affected by these trends, please contact us.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.