CANBERRA approved more than $170 billion of foreign investment in Australia in 2011-12, according to the annual report of the Foreign Investment Review Board.
Real estate has replaced mining as the magnet for foreign money for the first time in the recent history. The Treasurer ticked off $59.1 billion of overseas investment into the property sector, with more than two-thirds of that money going into commercial property.
A recent influx of overseas money into the Australian commercial property sector has been led by Asian investors and overseas pension funds. Interest in the residential sector decreased slightly from $20.9 billion in 2010-11 to $19.7 billion in 2011-12.
New South Wales is the favourite investment destination for overseas real estate investors, followed by Victoria and Queensland.
Though interest in the mining industry declined from previous years, it still managed to attract $51.7 billion worth of investment. The oil and gas sector attracted the most investment, followed by gold-copper and iron ore.
Foreign interest in the iron ore industry - Australia's largest exporter earner - declined over last two years. In 2010-11, there was only $3 billion worth of investment in the industry, which regained some lost ground in 2011-12 to $8 billion. In comparison, close to $50 billion worth of investment was approved between 2008 and 2010.
The United States remains the single largest source of investment, with more than $36.6 billion worth of projects, followed by Britain and China. It is the fourth consecutive year that China has been ranked in the top three investors in this country.
The sensitive agricultural, forestry and fishing sector accounted for only a fraction of total investment at 2 per cent, but there has been a significant increase of investment in this sector from $1.4 billion in 2010-11 to $3.8 billion in 2011-12.
The three largest investors in this sector are Canadian, British and American. The report says the average level of foreign investment in the sector has been just over $2.5 billion. ''Investment proposals in this sector are inherently irregular and can be skewed by large transactions with several large competing bidders.''
In 2011-12, controversial Chinese investors made only $27 million worth of investment in the sector, less than 1 per cent of the total investment in the agricultural sector.
Trade Minister Craig Emerson called for greater co-operation between Australia and China in the agricultural sector in a report released yesterday and said the Australian government would continue to make transparency in foreign investment in the agricultural sector a high priority.
He said prospective investors needed to consider the employment of suitably skilled Australian workers in new agricultural developments before they could turn to overseas labour market.