IF it’s not Chinese Buyers … said to have fallen off … but for how long?
Then … isn’t it likely to be others from India, Indonesia, Thailand, Vietnam, Malaysia … otherwise why are both our Federal and NSW Govts maintaining policies to enable foreign buying of Our Real Estate?
-RE Agents set up across Asia
-the May 2017 Budget Reg allows 100% sell off of ‘new homes’ to foreign buyers
-Real Estate Sector exempted from Anti-Money Laundering Rules: Oct 2018
… AND why has the NSW Govt legislated for the Medium Density Housing Code and the Greenfield Housing Code with lots as tiny as 200sqm X 6M wide … if it were not to maintain high immigration, Visa Manipulation and foreign buyers of our domestic Real Estate?
WITH such policies it would appear the tectonic plates have been shifted against Australian Youth and their aspirations for a roof over their head!
To dispel the myth … Foreign buyers in their thousands have bought established homes … demolished them for a ‘new home’ …
‘Get over it’: Bob Carr’s advice to prospective homeowners concerned about Chinese buyers
Chinese buyers are snapping up Aussie real estate. But a prominent former politician had a simple response for those concerned.
JULY 5, 2019
Concerns about Chinese buyers snapping up property, leading to higher prices, is a common bugbear among prospective homeowners.
Foreign investors are thought to own around 500,000 Australian homes, many of those in Sydney and Melbourne.
But former Foreign Minister and New South Wales Premier Bob Carr has a simple response to those who are concerned about the influx of Chinese, and other nations, cash into Australian property: “Get over it”.
The Government’s Foreign Investment Review Board (FIRB), which regulates overseas investment in Australia, states China is second only to the US when it comes to countries splashing the cash down under.
“The US recorded an increase in approved investment from $26.5 billion in 2016-17 to $36.5 billion in 2017-18, with significant increases in real estate,” FIRB’s most recent annual report stated.
“China was the second largest source country following a decrease in approved proposed investment to $23.7 billion in 2017-18 from $38.9 billion in 2016-17.”
A real estate event in Shanghai spruiking Australian property to Chinese investors.Source:News Corp Australia
*However, while only 17 per cent of US investment in Australia is in real estate, 54 per cent of Chinese cash coming into the country is placed in property.
Mr Carr, who was NSW premier for a decade up to 2005, was answering a question posed at Tuesday’s Out There Summit, organised by the Western Sydney Leadership Dialogue.
Held in the Sydney suburb of Bankstown, the conference was focused on the economic, social and cultural forces at play in western Sydney which houses two million people — a figure that’s rising.
The Labor statesman had told attendees that a population spurt in western Sydney had partly been caused by rising immigration, an area controlled by the Federal Government. But he said Canberra had failed to invest enough in infrastructure to handle the new arrivals.
*Mr Carr was challenged that given his concerns of the rising population in Sydney, how did he “reconcile this position with your high-profile support for Chinese investment in the city that powers much of its growth?”
Former NSW Premier, Bob Carr told the Western Sydney Leadership Dialogue’s Out There Summit in Bankstown that foreign investment in property was only set to continue. Picture: Simon Bullard/AAPSource:News Corp Australia
‘GROW UP, FAST’
Mr Carr, who has a longstanding interest in China and has held a number of China-related academic posts, said he wanted Sydney’s economic clout to increase.
“China isn’t the biggest investor in the NSW economy, it comes from all around the world,” he said.
“I want a growth economy; I want Sydney to attract investment, not just from China.”
Mr Carr added that the era when North America and Europe dominated international investment was coming to an end.
“Get used to investment from Asia because the economic centre of gravity on our planet is shifting to Asia.
“It’s not just China; it’s also India and South East Asia — there will be nothing abnormal about (investments from these countries) in the years ahead.
“China, India, and potentially an economic giant in Indonesia which will have an economy bigger than ours, will drive a lot of growth in investment decisions in this part of the world.
“This is just a reflection of the tectonic plates shifting — so grow up fast, our world is changing.”
*Director of Economics, Regulation and Policy at accountancy firm Ernst and Young, Janice Lee, backed up Mr Carr and said simply throttling back on overseas investors wasn’t necessarily the right answer.
“Australia is an open market economy and there are always concerns of investment by foreign government agencies but that capital flow into the Australian economy is the way we are.”
Ms Lee said there were other avenues the Government could pursue if it wanted to ease the pressure on housing.
“There have previously been and there are still restrictions on foreign investment on housing in Australia. But is that the lever you want to be relying heavily on to make sure there is enough housing for population growth?
“There are other levers such as planning for density and planning reform that could support housing development.”
More than half the Chinese money coming into Australia is spent on property. But the US is the biggest foreign investor overall. Picture: iStockSource:Supplied
The FIRB places restrictions of foreign nationals hoping to buy Australian property. They can only buy new houses and the deposit they have to put down is often far larger than for Australians.
CAAN: See our intro for how they get around ‘the rules’; fees and charges are insignificant for the High Net Worth!
BB: House prices in most of Australia had been rising since 2012 before taking a tumble around 2017.
Year-on-year, prices in both Sydney and Melbourne have slumped by more than 9 per cent. Although lower interest rates and a post-election bump have seen house prices rise by a modest 0.1 and 0.2 per cent respectively in the biggest cities last month, according to CoreLogic.
In January, a report from Chinese international property portal Juwai.com said Australia’s softening housing market was boosting interest from Chinese investors.
While inquiries from Chinese buyers had dropped by as much as 20 per cent earlier in 2018, partly due to Beijing tightening capital controls, interest had rebounded.
There was now an “insatiable appetite” for Australian property among Chinese buyers.
CAAN: Could this be due to the introduction of the Medium-Density Housing Code and the Greenfields Housing Code esp. the former for the inner and middle rings of Sydney
CAAN Photo: Medium Density
CAAN Photo: Medium Density
BB: Bank deposits in China earn low interest, the stock market is underperforming and the domestic real estate market is heavily regulated making investing difficult. That means buying up overseas is popular.
In 2017, ANZ bank found foreign buyers owned up to 400,000 Australian homes, that number will be higher today.
ANZ also estimated foreign investors bought between 30,000 and 50,000 new dwellings in 2015-16.
Foreign investors can only buy new homes in Australia, not existing property. Picture: Shae Beplate.Source:News Corp Australia
CAAN: Incorrect! Able to purchase an established home to live in Australia on a temporary visa; demolish it for a ‘new home’ … yet another loophole …
Earlier this year, real estate expert Doug Driscoll told news.com.au that 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.
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.
*“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 micro economy — what happens to the local coffee shop or newsagent when there are fewer people living in the area than there should be?” he said
*“It’s irrelevant whether (buyers are from) China, India, Great Britain or the moon — it lacks foresight.”
Within Australia, Melbourne is the biggest market for overseas property investors followed by Sydney, Brisbane, Adelaide and Canberra.
Additional reporting by Alexis Carey