An empty House Tax here in Australia could raise a comparable $40M in each State …
-to fund housing initiatives
-but that does not restore housing affordability for the incumbents locked out by foreign buyers
AND on the important level of ‘community well-being’ … this could be achieved through the restoration of housing affordability for incumbents by blocking the Proxy laundering the ‘hot money’ in Australia’s domestic housing market …
This in turn will stop the vacant land banking and vacant properties full stop.
Contrary to the Morrison Government in the lead-up to the May 2019 Election, Labor had a plan to stop property money laundering … it was going to implement the Second Tranche of the Anti-Money Laundering LEGISLATION … and reverse the Real Estate Gatekeepers exemption made by the Morrison Government in October 2018!
-that would have eliminated the Proxy, and the ‘hot money’
-and restored the home market for Australian First Home Buyers
MEANWHILE the Chinese developer lobby here in Australia are replicating their ‘ghost cities’ that fall apart … as reported by Serpentza …
RESIDENTIAL RENEE MCKEOWN WED 12 FEB 20
Calls for Empty House Tax Review
There are calls for an empty home tax to be reviewed and enforced across Australia after Victoria raised $5.4 million from a possible $120 million last financial year.
There were more than 20,000 empty homes in Melbourne and that number could be even higher in Sydney and Brisbane according to research from Prosper Australia.
However Victoria was the only state to impose a vacant residential land tax at 1 per cent for properties left empty for more than six months in a year in Melbourne.
Prosper Australia director of research Karl Fitzgerald said there was a missed opportunity—although the tax was brought in, it was not properly enforced and investors were still choking the supply.
“Quite a few housing advocates are simmering with rage because we’ve seen such a dramatic rollback of housing supply,” Fitzgerald said.
“More and more people are having their finance approved but cant find property to buy.
“We found at a minimum 20,000 properties were vacant [in Melbourne] and use zero litres of water over a 12 month period. Yet only 900 people self reported [for the tax].
“The government needs to impose fines, there’s no real penalty for not declaring.
“There’s a whole pile of issues [around this tax] it only included inner and middle ring properties, so it primarily targets foreign investors who own empty apartments but ignores the big land banks. ”
*A similar tax was introduced in Vancouver, Canada where almost $40 million was raised to fund affordable housing initiatives and saw a reduction in empty properties.
The tax led to 22 per cent fewer vacant properties in 2018 compared to a year earlier and a 7 per cent increase in tenancy.
City of Vancouver mayor Kennedy Stewart said the main objective of the tax was to address housing affordability.
“For those who choose to keep their properties unoccupied, we appreciate their contributions to the funds that are supporting various, much-needed affordable housing initiatives across the city,” Stewart said.
“The main objective of Vancouver’s Empty Homes Tax is to influence property owners to put their empty properties on the rental market and the data shows that is happening.”
Prosper Australia director of research said more could be done in Australia, not just the inner Melbourne region.
“We have tried to get access to this [vacancy] data interstate and it hasn’t been easy,” Fitzgerald said.
“We are surprised the government hasn’t really been on the front foot if they were genuinely serious about addressing affordable homes.”
Photo: The Australian; Toorak, dubbed the “ghost mansion”, is being sold off market for $80m
IS a Pandemic what it takes to restore the property market for Australian First Home Buyers?
Will the Property Sector get their act together?
Even developers are closing the gates … cancelling launches and investment seminars for the target overseas market …
And even Scomo can’t prop up the mates market … with the Pandemic worsening …
BECAUSE many comments on Facebook are not readily visible we SHARE it with you here
From George Smilas …
WOW, really? are we supposed to be devastated? ….devastating that the flow of wealthy international investors from China have stalled because of a real risk of a deadly infectious disease threatening our people here?
…Not buying up apartments built for the sole purpose of further increasing the riches of our ELITES?. I feel really sorry,…. But WHY you think? …Why are they cancelling investment seminars?
…Are there not other investors around the world aside from CHINA?…Or is it because there is no $$$$$$ to be made elsewhere other than CHINA?….I want to know.
Have we put our efforts all in one basket and relying on just CHINA? …. Is that the case?…I want to know…… I seem to remember this notion of affordable housing being bandied around….is this our chance to get our homeless into a HOME now?…..I want to know.
Otherwise, if not… Let’s shop around for another market for our illustrious high density precincts….SHOCK HORROR ….I’m sure there are others who are used to living this type of lifestyle. BANGLADESHIS perhaps?…….Why not?…open up our options?…….Oh… OHHH wait, they haven’t got the $$$$$$’s…..
Well, I say to the developer lobby groups and spruikers of residential trash….suck it up and realise all good things come to an end….diversify your market.
Shut down your spruiking trash seminars to Chinese only investors and avail your apartments for what they are worth to our domestic market….fill them up!!… and maybe …just maybe start building quality buildings that don’t fall apart.
Developers are cancelling launches of new apartment blocks and investment seminars targeting offshore buyers as they confront a potential fall in sales due to the coronavirus outbreak.
The property industry had hoped the new year would be marked by a pick-up in demand. While local buyers are out in force, a predicted surge in offshore investors into the top end of the residential market has been delayed.
Measures to contain the spread of the coronavirus in China and travel restrictions are causing problems for agencies as buyers can’t get to Australia.
…Investorist founder Jon Ellis said sales volumes coming out of China would remain low.
“The whole industry is in a bit of a pickle,” Mr Ellis said. “No property developers are going over there and also no agencies.”
He expects investment in Australia will slow as Chinese outflows fall off globally but he predicted they could pick up again after the scare dissipates. “Once coronavirus settles down and is under control, I think people will look back to Australia and will see it as very favourable. But certainly for the next month or two, I would not expect to see many contracts coming out of China,” Mr Ellis.
*But when will that be, Mr Ellis? And if it comes too early, as the CCP appears to be planning for, what will the private reaction to travel as the virus spreads globally? As well, students won’t return now until mid-year enrolments.
Given we already have a meaty property construction bust underway this is poor timing:
I expect house prices to slow and construction to bust all year.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
Under Australia’s foreign investment framework, foreign persons generally need to apply for foreign investment approval before purchasing residential real estate in Australia.
The Government’s policy is to channel foreign investment into new dwellings as this creates additional jobs in the construction industry and helps support economic growth. It can also increase government revenues, in the form of stamp duties and other taxes, and from the overall higher economic growth that flows from additional investment.
CAAN: However there are ways and means for Temp. Visa holders to get around this restriction of ‘new homes’ including buying an established property; then demolishing it (including Australian Heritage Homes) for a ‘new home’!
Foreign buyers can even apply for a Permanent Resident Visa in their own country before flying to Australia to buy our Real Estate!
The Guardian Visa allows the Guardian and the Child to buy one established home each or several ‘new homes’ each
SEARCH to find out more on our Website!
Foreign investment applications are therefore generally considered in light of the overarching principle that the proposed investment should increase Australia’s housing stock (be creating at least one new additional dwelling).
Consistent with this aim, different factors apply depending on whether the type of property being acquired will increase the housing stock or whether it is an established dwelling.
The annual vacancy fee is part of the Government’s comprehensive housing affordability plan and seeks to increase the number of properties available for Australians to live in. Foreign persons who purchase residential real estate will be subject to an annual vacancy fee where the property is not residentially occupied or rented out for more than six months in a year.
It is important that foreign investors understand and comply with Australia’s foreign investment framework as strict criminal and civil penalties may apply for breaches of the law, including disposal orders.
CAAN: Only a minimal number of these properties have been disposed of!
AUSTRALIA’s property … this time the focus is on Commercial Property … and perhaps our Biggest Export … Our Title Deeds … many now with the CCP, in Singapore, and Hong Kong … gotcha … what was Australian residential, agricultural and commercial property …
KEY POINTS …
-total foreign investment into Australia’s commercial property market reached $11.5bn in 2019
.or 33% of total investment activity
-the lion’s share of investment from foreign buyers at $6.5Bn was in office assets in Sydney CBD and the surrounding markets
WHY is this so? HOW good is the loss of such valuable assets to foreign buyers? WT ****!
Related Article: China Void filled by Hong Kong and Singaporean Commercial Property Investors
SEARCH CAAN WEBSITE to find more about David Irvine, the Foreign Investment Review Board (FIRB) … and the Treasury … the Treasurer!
Foreign investment: it’s focused in office and it’s Sydney
JLL figures show foreign investment levels into Australia’s commercial property market reached $11.5bn, or 33% of total investment activity over 2019February 04, 2020
AUSTRALIA, 13 January 2020 – Australia’s office investment market has attracted the largest share of foreign investment in 2019 across the commercial property sector, according to JLL figures.
JLL’s analysis of offshore investment into Australia’s commercial property market showed $9.2bn of office assets were acquired by foreign buyers over 2019. This compares to investment activity in the retail investment sector of $1.36 billion and $910 million for the industrial property sector.
*Total foreign investment levels into Australia’s commercial property market reached $11.5bn in 2019, or 33% of total investment activity.
*JLL’s Head of Office Investments – Australia, Rob Sewell said, “The figures show that it was office assets in Sydney CBD and the surrounding markets that had the lion’s share of investment from foreign buyers on a notional basis at $6.5bn.
This was followed by relatively lower levels of foreign investment in Melbourne ($1.3bn) and the remaining major capital cities. Interestingly, at the individual market level foreign investment in Adelaide trumped local investment, with Singaporean REITs and both German and U.S. fund managers contributing 58% ($460mn) of total investment over 2019.
“Overseas investors continue to show strong demand for office assets within Sydney relative to other major states given the breadth of top-tier institutional stock on offer. Sydney’s status as a global city ensures it remains easy to underwrite for international investors in search of high-yielding assets.
*“Investors, foreign or otherwise, took note of this in 2019 – Sydney CBD recorded its strongest year for transaction activity ever, with $9.4bn in office assets changing hands. This smashed the previous record of $6.2bn in 2018,” said Mr Sewell.
The latter half of 2019 saw several big-ticket transactions, with the Scentre Group office portfolio, 161 Castlereagh Street and 2 Chifley Square all trading.
Photo: 2 Chifley Square; realcommercial.com.au
100 Market Street traded as part of the Scentre Group portfolio and then again only six months later, reportedly for one of the sharpest cap rates on record for institutional grade office stock in the CBD.
Mr Sewell said, “The fact that the Hong Kong listed Link REIT, who acquired 100 Market Street in December 2019, chose Australia for their first investment outside of Hong Kong and mainland China speaks volumes to how our market is viewed globally.
Photo: 100 Market Street, Sydney; the Urban Developer
“Diversification benefits and a transparent commercial real estate market will continue to drive foreign investment into Australia, and buyers from Singapore, Hong Kong, Canada and China have also shown a willingness to take partial stakes in top-tier institutional grade stock,” he said.
The top 3 foreign buyers across the broader Australian commercial property sector in 2019 were Singapore, the United States and Hong Kong in that order, and this was mirrored in the office market as well
Investment Outlook for 2020:
JLL’s Head of Research – Australia, Andrew Ballantyne said, “Most signs point towards the global and domestic economy muddling through in 2020. Investors remain cognisant of risk factors and will be disciplined in investment decision making.
“In a low interest rate environment Australian commercial real estate appears attractive relative to other asset classes. Logistics will remain the favoured sector, while office investors will seek geographical diversification in their portfolios and explore opportunities outside of Sydney and Melbourne.
“The retail sector will be more interesting in 2020. Investor interest is being stimulated by the relative value proposition as the average yield spread between retail and office / logistics has widened. Shopping centres with a strong trade area, limited supply risk and an ability to generate a diverse income stream will see healthy levels of interest in 2020,” said Mr Ballantyne.
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. Our vision is to reimagine the world of real estate, creating rewarding opportunities and amazing spaces where people can achieve their ambitions. In doing so, we will build a better tomorrow for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.3 billion, operations in over 80 countries and a global workforce of more than 93,000 as of September 30, 2019. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information
THE outbreak came ahead of the LunarNew Year holiday when many Chinese travel!
CHINESE NEW YEAR 2020: THE YEAR OF THE RAT … from 25 January to 8/9 February 2020
WHY did it take until 2 February 2020 for the Morrison Government to restrict flights from China to Australians?
With hundreds of TOURISTS sharing the airspace on flights, dispersing at international airports … taking transport to hotels, serviced apartments, homes, universities and shopping centres … isn’t it commonsense for Australians to avoid these areas in view of the delayed Government response?
A 21-year-old Chinese student at the University of New South Wales was diagnosed with coronavirus earlier this week after she flew back from Wuhan on January 23 …
The Australian: Qantas suspends flights as virologist warns it is ‘deadlier than it looks’
Qantas will suspend flights to mainland China from February 9 and possibly sooner, after Singapore and the US introduced travel restrictions that will make it impossible for international crew to operate the services.
The announcement comes as Queensland’s Premier calls for Australia to suspend all flights from China as the death toll from coronavirus rises.
KEY POINTS …
–more than 200,000 people were due to fly this month (Feb) on direct flights from China to Australia
-tourist arrivals from China had plunged 15% since the crisis began
The coronavirus outbreak could rapidly get worse and become even deadlier as it continues to spread worldwide, a leading Australian virologist has warned.
Professor Trevor Drew is the director of the CSRIO’s Australian Animal Health Laboratory in regional Victoria, where fast-tracked efforts to develop a vaccine for the virus are now underway.
His chilling warning comes as a Qantas jet waits on standby to fly to Wuhan, the epicentre of the virus which is in lockdown, where around 600 Australians are stranded.
Just over a quarter of those Australians have registered with the Department of Foreign Affairs to be evacuated.+14
People wearing protective face masks to protect themselves from Coronavirus are seen at Brisbane International Airport+14
Thousands of people could have been exposed to coronavirus in Australia by the country’s nine confirmed patients alone
Professor Drew told The Australian previous research in pigs showed how coronavirus could become more lethal over time.
He said the contagion needs to be regarded as a ‘cloud’ of closely matched pathogens rather than one virus with the potential to become even deadlier in ‘a ‘high-host-density environment’ such as China.
‘You may well find that more virulent viruses emerge from that cloud,’ Professor Drew said.
‘What I am thinking might be happening here is not that people have been infected for some time with this virus, but that it is finding a new niche rather more slowly and that could ultimately cause more of a problem than we have seen with other diseases because it is not so spectacular early on in its evolution.’
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Professor Drew said Chinese authorities have recognised the outbreak could be worse than the SARS epidemic in 2003.
Professor Drew is leading the fast-tracked development of a coronavirus vaccine at the Australian Animal Health Laboratory, a high-containment facility in Geelong.
It is the only physical containment laboratory of its kind in Australia and one of five in the world.
Preclinical trials could be underway by March and a vaccine developed within four months.
‘Our role is to take the knowledge that we will be gaining from how this virus behaves and then creating the biological platforms that are necessary for developing and trialling vaccine candidates,’ CSIRO Director of Health and Biosecurity Rob Grenfell told reporters on Friday. Research team races to make a Wuhan coronavirus vaccine
A man wearing a face mask cycles past the body of a man who collapsed and died on a pavement in Wuhan, a city of 11million people which is under quarantine +14
CSIRO virology expert Dr Trevor Drew (left) and Director of AAHL CSIRO biosecurity expert Dr Rob Grenfell (right) addressed reporters on Friday+14
Australia’s gateways, major tourist destinations, universities and suburbs with large numbers of Chinese in Sydney and Melbourne have emerged as the frontline in the fight against deadly coronavirus. Passengers are pictured at Brisbane Airport on Friday
Authorities are closely watching key meeting places around the country for signs of outbreaks of coronavirus as the World Health Organisation declares a global public health emergency. Shoppers are pictured at a seafood market in Sydney’s Cabramatta +14
An man infected with coronavirus visited The House Of Delight restaurant at Glen Waverley in Melbourne’s south-east with five family members on January 26. Glen Waverley has one of Australia’s largest Chinese populations
Thousands of people could have already been exposed to coronavirus by Australia’s nine confirmed infected patients in three states.
Each one flew in from Wuhan in China’s Hubei province where the outbreak began, on planes packed with hundreds of potential victims.
China is Australia’s largest source of tourists and the top tourism destinations for visitors are Sydney, Melbourne and the Gold Coast.
Tourism Australia figures reveal 1,442,341 visits from China to Australia in the past year.
The three biggest eastern seaboard capital city airports account for 151 of the 167 flights from China to Australia each week.
To view the video see Source link
Flight attendants wear protective face masks at Brisbane Airport on Friday. There have been nine confirmed cases of coronavirus in Australia, including two in Queensland
Passengers at Brisbane Airport wear protective masks as the coronavirus is declared a global health emergency. Brisbane welcomes 16 flights from China each week
Queensland Premier Annastacia Palaszczuk claimed on Friday the federal government had not given the states enough information about who had entered the country.
‘I don’t know at the moment, in Queensland, where people from the Hubei province actually are because the Federal Government has that information,’ Ms Palaszczuk said.
‘If we don’t have the information, we cannot contain this virus.’
Prime Minister Scott Mr Morrison responded: ‘There would not be an issue the Commonwealth knows that the Queensland government does not.’
Chinese visitors to Australia spent almost $12billion in the past year and major shopping centres in Sydney, Melbourne and the Gold Coast are popular attractions.
WHAT DO WE KNOW ABOUT THE DEADLY CORONAVIRUS IN CHINA?
Someone who is infected with the Wuhan coronavirus can spread it with just a simple cough or a sneeze, scientists say.
Research done in 2018 found 15 per cent of Chinese tourists on holidays of more than 30 days visited Sydney’s Chatswood Chase shopping centre three or more times.
The latest ABS figures show there are 152,591 Chinese students enrolled in Australia, which is 38 per cent of all overseas enrollments.
A pamphlet handed out by the Australian Government providing travellers with information on the deadly coronavirus (pictured)
People they infected will be going about their lives on crowded trains and buses, having business meetings, and sharing meals – potentially passing the virus on.
Students at the University of New South Wales where a 21-year-old classmate was diagnosed with coronavirus on Monday say they are too afraid to go back to class
*Based on those figures, as many as 342,993 people may have entered Australia from China since the deadly virus was first detected in Wuhan seven weeks ago.
The number of families living in apartments increased by 56% between the 2011 and 2016 censuses which happens to coincide with the NSW Liberal Coalition Government and its subliminal message …
‘SYDNEY IS GROWING’ … NSW is growing at the fastest rate … and its push for higher density and high-rise!
The Medium-Density Housing Code lots are between say 300 and 400M2
Australian backyards have shrunk to below 50 square metres!
The Greenfields Housing Code was introduced in 2018 with lots as tiny as 200M2 X 6M wide with the dwelling largely occupying the lot … so not only is there no room for a shady tree, a bbq, or pool, there is no room for play equipment!
The average lot in Sydney and the Central Coast was 550M2 or 600M2 … now divided by 3 the developer makes a motzer!
WOW, rates of childhood obesity are climbing!
IF you are fed up with the Housing PONZI Scheme and want to change this …. message us through our Facebook link here below for a Campaign Plan! It is free!
With Australia’s mass immigration policy forcing people to live in high-rise apartments rather than traditional houses, a new study by Deakin University has found that high density living harming children’s wellbeing:
Families represent half of allAustralian apartment dwellers, and nearly half of them have children, according to 2016 Australian Census data.
The number of families living in apartments increased by 56% between the 2011 and 2016 censuses. Despite its growing popularity, there is evidencethis type of housing is not meeting the needs of Australian families…
*The City of Yarra is a Victorian municipality that has had a six-fold increase in the number of apartments over the past ten years. A household survey found residents in high-density areas of the municipality were less satisfied with their neighbourhood as a place to raise children…
Our finding that parents had difficulty accessing local schoolsand child care further supports the argument that private high-rise housing in Australian cities has been designed without considering children as residents…
CAAN: In Sydney, NSW Meriton pushed for childcare to be installed in apartment precincts … a benefit to developers with government subsidies and even more fees to collect! All bases covered … it would seem!
MB: A separate study by the University of Queensland, released last year, also found that the loss of backyards is harming children’s health:
Children with regular access to fixed play equipment at home or in a nearby park have much higher rates of physical exercise.CREDIT:FAIRFAX
The steadily shrinking backyard in Australia could be having an effect on how much exercise children get, new research suggests…
“What stood out to us was that the batters tended to have smaller yards than the other groups of kids,” Dr Moss said.
“And given they had no fixed equipment, there seemed to be a strong correlation there that if you don’t have a yard big enough to put that fixed equipment in, it’s hard to provide it for your kids”…
“Our backyards are getting smaller, and houses are taking up more space on smaller blocks, we really need to think about the urban design of our neighbourhoods,” she said…
It comes as rates of childhood obesity climb… Australian backyards were about 150 square metres on average up until the 1980s, at which point the average size began to shrink. Today, it is below 50 square metres.
In Australia’s major cities backyards are disappearing at an alarming rate as their populations swell:
For example, the Urban Taskforce projects that only one quarter of dwellings across Sydney will be detached houses by 2057, down from 55% in 2016:
So basically, Sydney (and other major cities) is facing a future where only the wealthiest residents will be able to afford a detached house with a backyard. By contrast, the working classes will be forced to live like sardines renting high-rise apartments.
Is this the futurethat we want to bestow on future generations?
BECAUSE they draw their market from the Chinese to launder their ‘hot money‘ in Australian real estate …
The Chinese New Year, is one of two annual spikes from offshore buyers, including a “golden week” holiday toward the end of the year when leading Realtors make $Millions like Sothebys Australia, and Black Diamondz Monika Tu
RELATED ARTICLE …
Fancy cars, luxury brands and multimillion-dollar property: Agents ready for New Year ..
The emergence of a new coronavirus in China has once again raised the spectre of a global pandemic.
It wasn’t that long ago that we had our last pandemic (the H1N1 virus in 2009, also known as “swine flu”) and less than 20 years since the 2003 emergence of SARS, another coronavirus that was highly lethal to humans.
The emergence of the “new” disease requires the virus to spill over or “jump species” from its reservoir into people. This event is complex and needs close contact, as well as a virus that can infect humans (not many animal viruses can).
*To truly emerge, the virus then has to possess the ability to infect other humans (even fewer can do this).
Humans also interact with wildlife through hunting and as a consequence of our use of their habitat to grow food and houses. This leads to diseases such as Hendra and Ebola.
The wildcard in all this is human behaviour driven by cultural and social norms. For example, the presence of live animal markets in parts of Asia is strongly associated with the spread of avian influenza and the origin of SARS — and we’re seeing it again this time with theWuhan coronavirus developing in China.
Basically, the more we interact, the greater the probability of a spillover of a pathogen.
The more often that happens, the greater the chance of us receiving one that is perfectly suited to human-human transmission.
*The most significant driver of emergence, however, is food production
There is no guarantee that switching away from animal diets will solve the problem, because the changes needed in the food system could have unintended impacts on other parts of our ecosystem, such as natural forests and their wildlife.
There are also extremely strong cultural preferences around diet, so it may be the hardest change to make.
The biggest risk now is the rise of “super-spreaders”. A single person (super-spreader) was responsible for moving SARS from China to a single hotel floor in Hong Kong and from there to multiple countries.
A super-spreader is a bit like a large ember in a bushfire. If an ember falls in a place with no fuel there is no fire. If it falls where there is an unlimited amount of fuel and the conditions are right, we get a wildfire.
*The ideal fuel conditions for a new virus are lots of humans living and interacting close together — like a large city.*
Reducing the “conflict” between human and natural systems — for example, by reimagining how we use landto make better allowances for natural habitat — will help take pressure off food systems, while addressing other environmental concerns like climate change, deforestation and land degradation.
Stopping the spread
Despite the risk of “super-spreaders”, the emergence of new diseases in places like China is actually a saving grace.
China has an excellent system and massive capacity to investigate and control diseases, and the country’s response to recent disease emergences has been highly transparent, competent and effective.
How extensive is the Australian property investor market?
IS there another major change to the Australian Housing Market … that has possibly had an even greater impact … ? Could that be the enormous competition from overseas parking their ‘Hot Money’ in our property market? Perhaps the Australian Supply could not keep up with this demand?
Fresh analysis has claimed the Coalition’s new housing deposit schemeworsens inequality and fails to address wider problems in the housing market.
CoreLogic head of Australian research Eliza Owen has argued in a blog post that the Morrison government’s First Home Loan Deposit Scheme (FHLDS) will give a leg-up to high-income earners and do little to boost home ownership rates.
Reserve Bank and Grattan Institute research shows home ownership rates among Australia’s top 20 per cent of income earners already sits well above the national average.
Yet, under the Coalition’s new scheme, these high-income individuals are eligible for the same level of government assistance as low-income earners.
“The scheme could be granting easier access to home ownership to people who are already more likely to attain it,” Ms Owen told The New Daily.
The Coalition’s scheme started on January 1 and provides government-guaranteed loans to first home buyers with deposits as low as 5 per cent of the purchase price.
It will help successful applicants get into the property ladder much sooner and remove the need to pay lenders’ mortgage insurance, which often runs into tens of thousands of dollars.
And Ms Owen said it also risks increasing inequality among hopeful home owners by giving a leg-up to high-income earners.
The scheme is open to individuals who earn a before-tax income of up to $125,000 a year and couples who earn up to $200,000.
Given individuals earning an annual salary of $125,000 are in the top 20 per cent of income earners, Ms Owen said the scheme’s income thresholds were too high.
Home ownership rates are much higher among this income bracket than lower income brackets – yet the FHLDs offers both groups the same level of assistance.
“The scheme may actually provide more advantage to those earning towards the top of the threshold,” Ms Owen wrote in her blog.
“Because they can save a 5 per cent deposit more quickly, and the scheme is currently limited to 10,000 guarantees a year.”
According to Ms Owen’s calculations, individuals at the top end of the scheme’s income threshold can save a 5 per cent deposit on a median-valued property ($540,974) in 18 months, while median income earners ($78,000) need 27 months, and low-income earners ($48,100) need 39 months.
But Ms Owen said high-income earners would likely take even less time to save a deposit, as the calculations assume that buyers across all income brackets will save 20 per cent of their income, when, in reality, higher-income earners can often save much more.
Asked what else the Coalition could have done to make life easier for aspiring home owners, Ms Owen said “there should be greater emphasis on building more social and affordable housing”.
“And some of the most impactful policies on home prices has been policies that limit investor participation in the market,” Ms Owen added.
CAAN: What could possibly be a cause? What is it that commentators … the Researchers, Journalists, University Professors … Economists seem to overlook … what’s so bleedin obvious when one visits the CBD … any major shopping outlet … sits on a bus or in the train … the supermarket …
Is it all the ‘new people’ … the new ‘permanent residents’? … OH!
EB: Ms Owen is far from the only property analyst to criticise the scheme.
*Brendan Coates, director of household finances at the Grattan Institute, previously told The New Daily that the scheme was too small to have an impact on affordability, and that an expandedversion would only serve to turbocharge prices, by ramping up demand.
Sydney’s luxury property agents are bringing forward listings and spending up on fancy cars to impress international clients on the eve of Chinese New Year.
The Chinese New Year is an annual high point in the local sales calendar but has lost steam since mid-2016 as a result of tighter restrictions on foreign ownership.
CAAN: Can you believe it? What happened wasCHINA imposed capitalcontrols to stop money leaving China at that time …
How can small percentage fees imposed by Australian State Governments … increasing by a mere 1 or 2% …. have any impact on people of High Net Worth? Seriously?
SH: Juwai, China’s largest property portal, registered an uptick of interest in Australian property in early 2019, with inquiries increasing 40 per cent. Last year, Chinese buyers made 60 per cent more inquiries for Australian property on the platform in the five weeks after the holiday than they did on average during the whole year.
“2019 was the year in which Chinese demand finally started to recover, after falling since 2016 to very low levels … we expect 2020 to see further improvement.”
In preparation, Sotheby’s Australia boss Michael Pallier has picked up a new Rolls-Royce Ghost ahead of a busy week of high-end showings, as 10 clients from mainland China arrive.
Other agents, including Black Diamondz boss Monika Tu, are entertaining with events organised through the likes of BMW and other luxury brands, who are keen to kit buyers out once they purchase their house.
Waterfrontproperty in the eastern suburbs at Point Piper and Bellevue Hill, and larger compounds across the upper north shore at Turramurra, Warrawee and Wahroonga are among the listings.
For Mr Pallier, the Chinese New Year is one of two annual spikes from offshore buyers, including a “golden week” holiday toward the end of the year. He says activity isn’t back to where it was in late 2015 when he drove clients around in a Bentley coupe and expected to turn over more than $100 million in property in a two-week period.This year, he expects to turn over about $30 million.
“The pool of buyers isn’t as large as it was before, but they’re still there and they are more likely to make repeat transactions,” he said.
Most of Mr Pallier’s clients are chasing good schools. Other agents say protests in Hong Kong are driving significant investor visa holders to take the plunge and buy up in Australia.
Chinese buyers who were affected by Xi Jinping’s effort to tighten capital outflows from China from 2016 onwards are also back in the market, after securing other sources of cash to complete transactions, or visas, such as the significant investor visa, ahead of time.
CAAN: China eased its capital controls in 2019 hence the return to investing in our Real Estate.
“I don’t believe that Chinese demand has ever dropped away; it’s simply that it became increasingly difficult for them to organise their funds,” Christie’s International agent Darren Curtis said.
He said the rebound in interest is most noticeable among buyers looking at properties priced from $5 million to $15 million, who were worst impacted when capital controls first took hold.
Agents are united in the belief that demand isn’t quite back to where it was.
“The Chinese [high net worth investors] … are often a bit more cautious than what we’ve seen back in 2014-2016,” Ray White director Victor Sheu.
“Chinese New Year will increase inquiry activity but not actual transactions until a later date.”