Foreign investment in South Australian residential property almost doubled in 2006-07 and there is no reason to expect or want it to fall any time soon.
The investors, who spent $460 million in South Australia, were not simply looking for a home.
They were also looking for a stable and desirable place in which to invest for long-term returns.
It is a simple equation: look for the cheapest investment with the best long-term prospects. While Adelaide house prices grew almost 20 per cent last year, the city remains one of the country's most affordable places.
Better yet, the state's two major growth prospects – mining and defence – tend to be industries that will experience decades of growth, not just the next three years.
In a state with low housing stock and increasing demand, foreign investors are simply making a smart investment decision.
But this is not something for domestic buyers to panic about, particularly in a xenophobic sense. The $220 million invested in established homes still represents only a small amount of the $12 billion of property sold in SA last year.
In some cases, that money is directed to big new housing projects that rely on the strength of numbers to start building.
The investment is also money coming into the market at a time when high interest rates and petrol prices have convinced many domestic investors to sit tight.
But South Australians should also welcome the foreign investment for reasons that go beyond the front fence.
While other states have greater levels of foreign investment, the rate of increase shows a strong level of confidence in SA's economy and housing market.
External confidence should not be dismissed. This small state has to connect with smart, wealthy nations to boost its profile and drive future opportunities.
Welcoming foreigners who choose to invest or make their home here is just the first step.
