A report from a Real Estate Agent that has some semblance of truth!
Doug Driscoll gets the picture! Of the not-so long-term frightening consequences for Australia of the sell-off by his colleagues!
HOWEVER we at CAAN will update Mr Driscoll on the Facts!
We put it to Doug that it is through China implementing capital controls that led to a drop in Chinese interest in our property from 2017/18 not the piffling Australian Government charges and fees …
CHINA in early February imposed FIVE YEAR Gaol terms for “underground banks” which tens of thousands of middle class Chinese use to funnel Billions out of China to buy real estate in Australia. Perhaps this move by the Chinese has been necessitated with Chinese interest returning in our property market due to the downturn in 2019?
View: Developers Hit with China intensifying Capital Controls with Gaol Terms for underground Bank Operators
ALSO it would seem that the Australian Chinese, Mr Driscoll, is referring to are likely to be acting as the PROXY aka the DAIGOU for the Chinese overseas property buyer … laundering the black money in our Real Estate freely with no Anti-Money Laundering Legislation in place for the Real Estate Sector!
For years Chinese developers have been acquiring large numbers of residential development sites in Australia — and this has continued through 2017, 2018 …
View: Influence has grown: Chinese developers buy one third of Australia’s sites in 2016
Since 2012, the size of the average development site bought by a Chinese developer has increased more than 18 times to 21,045 square metres in 2016
Also view: One Third of Australian Development Site Sales in 2017 to Chinese
Fears one million Aussie homes could soon be owned by foreign buyers
The country is at risk of becoming the “24th province of China” as we fail to “stem the tide” of foreign investors, an expert has warned.
Australia is selling off natural resources, farmland and property to China at a “crazy” rate — putting us at risk of becoming the “24th province” of the East Asian behemoth.
That’s according to real estate expert Doug Driscoll, who warned of the urgent need to start a national conversation about foreign ownership of residential property in particular.
While interest from overseas buyers has decreased in recent years, the Starr Partners chief executive said our overall rate of foreign ownership was still alarmingly high.
And he said a report released last month by Chinese international property portal Juwai.com showed there was now an “insatiable appetite” for Australian property among Chinese buyers, with our softening housing market boosting interest.
*In 2017, ANZ found foreign buyers owned up to 400,000 Australian homes. Today, Mr Driscoll estimated that figure would be “close to 500,000”.
ANZ also estimated foreign investors bought between 30,000 and 50,000 new dwellings in 2015-16.
At that rate, Mr Driscoll said it “won’t be too long” before a million homes were in foreign hands, with buyers from China and India the most common demographic.
“It doesn’t take a rocket scientist to wonder what impact that could have on our economy,” he said.
“We’re only a population of 25 million with 10 million dwellings, and if we’re not careful we could be overrun quite easily.”
Mr Driscoll said it was a difficult topic to broach, with those who voiced concerns about foreign ownership often accused of racism.
But he said it was essential to “leave emotions at the door” and look at the facts.
“I’m not being jingoistic or xenophobic. It’s absolutely crazy how much of Australia we’re selling off to China, and it surely won’t be long until they have far more influence in our day-to-day lives,” he said.
“It’s irrelevant whether (buyers are from) China, India, Great Britain or the moon — it lacks foresight.
“I look at the facts, and there’s a really high number of current properties owned and acquired by overseas buyers.”
Mr Driscoll also took pains to point out the difference between local buyers of Asian descent — who are clearly Australian — and overseas residents based outside the country who often leave their properties vacant for large chunks of the year, leading to the “ghost house” phenomenon.
“I’m not saying we should stop foreign buyers, but it should be more difficult because a lot leave their properties empty, which clearly has an impact on the rental market, and those ghost homes also have a wider impact on the microeconomy — what happens to the local coffee shop or newsagent when there are fewer people living in the area than there should be?” he said
Mr Driscoll acknowledged fines had been introduced for foreign owners who left their properties vacant but said they were too small to affect offshore-based “multi-millionaires”.
He said we should strike a balance between New Zealand’s ban on most foreign homeowners and the 15 per cent tax imposed on foreign buyers in large parts of Canada.
“Last year, Chinese developers acquired a third of all residential development sites in Australia — that’s astonishing,” he said.
“We need to be open for business to China and India — they’re the countries with the most foreign investors with a burgeoning middle class of hundreds of millions.
“But we need to introduce stringent rules and regulations regarding foreign investment because the government’s interest should be protecting its citizens.”
He said, at the moment, the only factor that could limit Chinese buyers was restrictions placed by the Chinese government in an attempt to stop local money leaving the country.
(see CAAN introduction for Update)
Mr Driscoll also said Labor’s proposed changes to negative gearing and capital gains tax — in a bid to make it easier for first homebuyers to get their foot in the door — were unnecessary given first homebuyer activity had already increased in recent years.
But he believes changes to those policies would make property less attractive to local investors, which could impact house prices — and lead to an “influx” of foreign buyers who he claimed were using “ingenious” ways to get money illegally out of their own country, particularly in China where they are only allowed a maximum of $50,000 a year.
“If they are getting this money out of China, then they are finding ways to get it into the Australian system,” he said.
However, a spokeswoman for the office of Opposition Leader Bill Shorten told news.com.au independent experts such as Treasury and the Grattan Institute did not believe changes to negative gearing would affect property prices.
(CAAN: And such investment properties would be grandfathered)
She stressed foreign investors could only buy new properties in the country
(CAAN: Incorrect; foreign buyers have been circumventing this for years; e.g. demolish an established property that they purchased through their current visa; build a new dwelling and gain permanent residency)
and that new property was also exempt from Labor’s restrictions on negative gearing — and that both policies were designed to encourage investors to build new housing and not speculate on existing housing.
Meanwhile, realestate.com.au chief economist Nerida Conisbee said changes to negative gearing wouldn’t be enough to entice back foreign investors in droves.
“I don’t think (changes to negative gearing) will lead to a recovery of offshore investment unless we see price growth returning, cut taxes for offshore investors, ease up on finance and have more development,” she said.
“There’s nothing at this stage to suggest foreign investors will be coming back to Australia any time soon.”