JUWAI predicts Chinese Investors remain keen to buy Australian Property … are they seeking cheaper prices?

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CAAN Photo: Natura by Romeciti Waterloo Road Macquarie Park now underway. Have all the dwellings been sold off the plan or are there some not yet sold to go onto the lease market?

JUWAI predicts Chinese Investors want to buy Australian Property … are they seeking cheaper prices?

BECAUSE Chinese real estate firm Juwai IQI said they expected foreign buyers to Australia’s capital city markets where prices are expected to stagnate or fall.

EXTRACT from Juwai website:

39-year-old Boris Mei works in the Chinese export industry. He is one of the more and more Chinese people who want to buy real estate overseas.

He said: “I am thinking of Los Angeles or Melbourne because we have relatives in both cities. We hope that our 14-year-old daughter can study in these two universities and experience the overseas lifestyle. In the future, we may emigrate the whole family.’

View:

https://www.juwai.com/news/311552.htm

FURTHER, that currently inquiries from China are down 14%, and that demand from local Australian buyers has fallen further.

Marketers are pushing more buyers to look at Australia instead of the U.S. and the U.K.

Juwai and others continue to peddle the myth that these buyers are only permitted to buy ‘new homes’ under foreign investment regulations … however once they gain a Permanent Resident (PR) Visa following real estate purchase,  they can buy established homes too!

And/or another loophole while on a Temp Visa if they buy an established home (allowed for the time of the Temp. Visa) they can demolish it for a ‘new home’.

It is reported that auction clearance rates have halved to 33.8 per cent in the week to 19 April due to the shutdown of in-person auctions on 24 March, and the closure of our border to Chinese tourists; enacted on 1 February.

However, the property sector has clout and the restrictions are to be eased this Saturday 9 May in NSW.

Prof. James Laurenceson (the Acting Director of the Australia-China Relations Institute at the U.T.S. ) (ACRI) said ‘cashed-up’ (is that ‘hot money’?) property investors obviously are likely to maintain their interest in Australian apartments.  Why wouldn’t they with a PR Visa and medicare benefits following purchase … and the ability to bring out the whole family through a range of Visas including: Family, Student, Parent, Grandparent and Guardian?

To top it off he said that the Chinese economy would better resist the CoronaVirus … giving the Chinese more money to spend overseas, and that …

-China’s wealth has not disappeared

-no property price collapse in China

-one common form of asset for Ch households

With friends like the FIRB and the ACRI what more do they need?

With the oversupply of off the plan apartments perhaps developers are pushing for the floodgates to be opened to offload their defective dwellings to the money launderers?

LET’s hope in the process that Australia is not beset with a second deadly wave of Covid-19?

WHY the push to fast-track more development for Chinese buyers when there is an urgent need for social housing for Australians?  200,000 Social Housing dwellings!

Perhaps it is too late for the FIRB to keep its guard up?  Time for it to go!

However, Martin North from Digital Finance Analytics contrary to Laurencenson said the Chinese economy is not strong. And that China is encouraging its people to invest in China

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CAAN Photo: Note ‘For Sale/Lease’ sign displayed for CHINESE DEVELOPER JQZ of its Prime Precint in Waterloo Road Macquarie Park. Perhaps this bears out what Martin North is saying that China’s economy is not so strong; that China may have again restricted money leaving China? Note bottom righthand corner the WeChat symbol!

Read more: ‘Chinese investors are waiting to snap up Australian property at cheap prices once travel restrictions are lifted’

https://www.dailymail.co.uk/news/article-8282993/Chinese-investors-preparing-buy-cheap-Australian-property-restrictions-lifted.html

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CAAN Photo: Natura in Waterloo Road Macquarie Park; the majority of dwellings would have been sold off the plan

IS IT ONLY BECAUSE AUSSIES ARE ON SH.T WAGES … INSECURE WORK … AND PROPERTY INVESTORS BUY UP MOST HOMES THAT HAS LED TO THE DECLINE IN HOME OWNERSHIP?

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CAAN Photo: See that little symbol for WeChat on the right hand corner … look for this symbol on all ‘For Sale/Auction’ signs …

VIEW RELATED ARTICLE ON THE FIRB:

https://caanhousinginequalitywithaussieslockedout.com/2020/03/08/how-has-the-firb-escaped-scrutiny-about-alinta-and-a-black-box-that-needs-an-overhaul/?fbclid=IwAR0_1SHmOBJSIATYg4de_FVm6inpXCK2Arnqjm5zmCy2OleTxQN_fQsAI7A

AND SEARCH CAAN WEBSITE … for more reports on …

-the Foreign Investment Review Board, (FIRB), David Irvine and Phil Gaetjens

-the second tranche of the Anti-Money Laundering Laws shelved; the real estate gatekeepers made exempt in October 2018 by the Morrison Government

IS it WorkChoices by Stealth alone that is at the core of the loss of Home Ownership? Or is there more to it?

… FINALLY a little truth is revealed in this article but what is at the core of the rotten apple is again overlooked!

‘How Australia’s casual workers and investors are behind the decline in home ownership

IT is not only the inflated price of housing but new research reveals that the casualisation of the workforce and the growth of property investors together have led to the decline in home ownership ….

HOWEVER what is not revealed here is that it is not only homegrown property investors but a World-wide market particularly from China with a resource of some 1.4 BILLION People including millions of High Net Worth! 

That is perhaps where ‘the growth in property investors’ stemmed from … a consequence of the ‘FIRB’ ruling allowing developers to sell 100% of ‘new homes’ overseas

Image may contain: sky, plant, tree, skyscraper and outdoor
CAAN Photo Chinese Developer JQZ Prime Precinct in Waterloo Road Macquarie Park

The report, Australian home ownership: past reflections, future directions

Predicts:

-by 2040 those aged 25 to 55 will have only a 51 per cent chance of owning their own home

down from 60 per cent in 1981

home ownership will fall to 63 per cent; down from 67 per cent in 2016

QUESTION:  How many of that 67% in 2016 are Australian born compared to new ‘Permanent Residents’ from overseas?

Swinburne University of Technology undertook the research on behalf of the Australian Housing and Urban Research Institute. (AHURI)

-in the 1950s, ‘60s and ‘70s the majority had stable incomes in full time work

-a change occurred in the 70s;  now more than 24% have casual work

-casual work locks out these workers from gaining a mortgage

No refererence to where ‘the demand’ for Australian housing came from?

Which caused the price hike …

Professor Burke came close with this comment:

“The financialisation of housing is an international factor and is best understood as the process where housing is treated as a commodity to be invested in rather than a home, meaning more and more money flows into housing but without any necessary improvement in housing supply or quality,” he said.

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CAAN Photo: Chinese Real Estate Agency ‘Sunny Group’ for JQZ PRIME Macquarie Park

Professor Burke conceded that:

-renters needed greater security and quality housing

-policies to enable them to build wealth

-more social housing was needed

BUT THEN rather than laying the blame at the feet of very pooor government policies written to benefit developers and their overseas buyers particularly from China the Professor laid the blame at the feet of ‘older home owners’ having acquired wealth … often over 40 years or more to buy the ‘family home’ … it is alleged wealth through home ownership … aside from the cost of maintenance, rates, taxes

Forgetting that if one sells, it is at a loss with the cost of real estate sale, legal expenses, stamp duty, moving etc etc

-that the inflated price is due to the foreign demand particularly from China

the Morrison Government exempted the Real Estate Gatekeepers from the second tranche of the anti-money laundering laws in October 2018

IT would seem these are the reasons that we will have long-term social problems until AUSTRALIANS jack up and demand a stop to these policies!

AND a thorough investigation of the FIRB! Disband the FIRB!

AND VOTE FOR A PARTY THAT WILL ADDRESS THIS!

READ more from Melissa Heagney, ‘How Australia’s casual workers and investors are behind the decline in home ownership’

The China Vision Times writes with hubris …

AUSTRALIAN HOMES are being ‘banked‘, demolished for medium-density

IT was put about early in the term of the NSW Libs that SYDNEY WAS GROWING … we have to have higher density to meet the population growth … that this would be addressed by developing high-rise Precincts near railway stations, and on bus routes …

BUT that has not been enough … with Millions of ‘buyers’ overseas …

Former Urban Taskforce CEO, Chris Johnson in a 2018 media release reported that ‘30% of dwellings in Sydney are apartments with 14% being townhouses and 55% detached houses.

By 2024 the detached homes will have dropped to 49% and apartments grown to 34%.

In 40 years-time apartments are predicted to be 50% of Sydney’s homes with 25% as townhouses and 25% as detached houses.

WHERE have all the buyers come from? For both high-rise and urban sprawl … as our Australian Heritage and neighbourhoods are demolished for ‘Exempt and Complying Development’ … of terraces, townhouses, triplex and duplex

‘The Chinese Vision Times‘ writes:

‘ … almost 4.2 million people moved to Australia between 1945 and 1985. These people built homes inspired by their European backgrounds and contributed heavily to the aesthetic and architectural culture of Australia. Today, these post-war homes are increasingly being demolished.’

(Image: Screenshot / YouTube)

Property prices in Australia have almost rebounded back to their peak levels after falling for several months. (Image: Screenshot / YouTube)

WITH yet another surge of overseas buyers from China and Hong Kong …

NOW one reads in ‘The Chinese Vision Times‘ ‘Good Ol’ Post-War Australian Homes Face the Bulldozer. ‘ writes in its very confident way …

With such hubris

Australian’s today have no use for such big homes so they are being bulldozed.

(Image via pixabay / CC0 1.0)

Australian’s today have no use for such big homes so they are being bulldozed. (Image: via pixabay CC0 1.0)

And there have been so many beautiful Heritage and Mid-Century homes bulldozed for fugly development of duplex, townhouses and terraces now devouring where we live as more fly in … to launder their ‘hot money’ for their Permanent Residency

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Mystery surrounds the $60 million Chinese owned vacant estates of Toorak

The Mansion on St George’s Road TOORAK was flattened 4 years ago DESPITE its Heritage Listing …

The last time the property was up for sale was in 2013; a couple paid $18M for it and then demolished it in 2015.

That caused much controversy in this community as many considered this Mansion to be the centrepiece of this very lavish street.

-the site is up for grabs with an asking price of $40M

-the local community action group have expressed the desire for a single dwelling of two storeys

‘the sale is happening off the market’

WHAT does this mean?

-is it selling or has it already been sold without public advertising?

-what is the urgency for an immediate sale?

-are the vendors in trouble with the CCP?

HOW likely is it that they would be in trouble with the Australian authorities when the Real Estate Sector is exempt from Anti-Money Laundering Laws?

RELATED ARTICLE ….

https://caanhousinginequalitywithaussieslockedout.com/2020/02/22/how-did-the-real-estate-gatekeepers-weasel-their-way-out-of-the-second-tranche-of-the-anti-money-laundering-laws/?fbclid=IwAR3FZylMqsZU9KPlRt8bb8Osrn60TTTt9HvuOMTFSO7KCdOtKKCKRAyBmCY

Mystery surrounds the $60 million Chinese-owned vacant estates of Toorak

Tom Cowie
By Tom Cowie

View all comments

Nearly $60 million worth of real estate in one of Toorak’s most-exclusive streets has been reduced to a patch of dirt, with mystery surrounding what’s going to happen to it.

On well-heeled St Georges Road, where two grand mansions once stood side by side, sits a couple of Melbourne’s priciest vacant blocks after bulldozers razed both properties.

Melbourne real estate records were smashed a few years ago when a Chinese buyer paid just under $40 million for the 1920s Mowbray mansion at 18 St Georges Road.

The gates of Mowbray remain after a 1930s mansion was knocked down in Toorak.
The gates of Mowbray remain after a 1930s mansion was knocked down in Toorak.CREDIT:LUIS ENRIQUE ASCUI

The palatial six-bedder, sitting on 5000sqm with a swimming pool and tennis court, succumbed to the dozer blade in recent months after it was damaged by fire and vandals started getting inside the vacant property.

The gates bearing the Mowbray name are still standing.

RELATED ARTICLE

Palatial spreads kept empty? That’s rich

Title documents show the property belongs to a buyer by the name of Qi Yang. The Australian Financial Review reported at the time that Mr Qi won Foreign Investment Review Board approval to buy the land, which came with a hefty $5 million stamp duty bill.

The City of Stonnington said no plans had been lodged for the property after a demolition permit was granted in May last year.

The vacant block at 16 St Georges Road in Toorak.
The vacant block at 16 St Georges Road in Toorak.CREDIT:TOM COWIE

Under the council’s planning scheme, a building permit is only required for two or more dwellings or a subdivision.

There is no sign of tradies next door either, since the Idylwilde mansion was controversially torn down in 2015, prompting an outcry in the community over lost heritage.

Bought for $18.5 million in 2013, the former landmark 1913 estate at 16 St Georges Road is now chock full of weeds and surrounded by security fencing.

*The lack of action has prompted speculation about landbanking.

The former house at 16 St Georges Road, Toorak.
The former house at 16 St Georges Road, Toorak.

*Owner Xiaoyan “Kylie” Bao put the property on the market last year with a $40 million plus price guide after plans to build a grand $18 million home were shelved.

However, one buyers’ advocate who deals with high-end property said the owner would be lucky to get anywhere near that.

The Idylewilde mansion was destroyed in 2015.
The Idylewilde mansion was destroyed in 2015.CREDIT:EDDIE JIM

“They paid way over the top,” the property watcher said.

Those two vacant blocks could soon be joined by another, if a third mansion is demolished further down the street.

A 7200sqm block at 29-31 St Georges Road is quietly up for sale after sitting dormant for nearly three decades.

*The rumoured asking price is as much as $75 million, after the property was bought by the Yu family for $5 million in 1991.

A chunk of change like that would obliterate the property record established by Mowbray and later eclipsed when Australia’s former government house, Stonington in Malvern, sold for $52.5 million in 2018.

The former Mowbray mansion at 18 St Georges Road in Toorak.
The former Mowbray mansion at 18 St Georges Road in Toorak.

Several planning applications have been knocked back over the years to build units on the land, however there might finally be a change of ownership around the corner.

A half-built French Renaissance-style house on the land would probably be knocked over, according to selling agent Andrew Baines.

“It’s purely land,” he said.

The tennis court, pool and mansion are no more at 18 St Georges Road.
The tennis court, pool and mansion are no more at 18 St Georges Road.CREDIT:LUIS ENRIQUE ASCUI

Toorak Village Residents Action Group president Eddie Young said the neighbours were waiting to see what would happen with the properties.

He said he had been told that a single dwelling would be built at 18 St Georges Road, which locals were pleased with.

Next door, however, was another story.

“It’s a mystery,” he said. “And it looks dreadful.”Play Video

Coronavirus evacuees describe relief

Play video1:30Vacant Toorak block on the market for $40 million

VIEW SOURCE LINK BELOW TO PLAY VIDEO

A controversial block in Melbourne’s blue ribbon suburb of Toorak is up for sale with an eye-watering price tag of $40 million.

Tom Cowie

Tom Cowie is a journalist at The Age covering general news.

SOURCE: https://www.theage.com.au/national/victoria/mystery-surrounds-the-60-million-chinese-owned-vacant-estates-of-toorak-20200207-p53yq9.html?fbclid=IwAR2a5Q-OIEkHlOWw6oVDFmdebBkr0bBKubq7FiFADyXOmQBLOgiszQxlQCs

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Surrey Hills auction won from Wuhan lockdown amid coronavirus

ARE such purchases made on behalf of others?

i.e. … a side deal as PROXY BUYERS to skirt restrictions on foreign buyers?

HOW confident can we be about the money?

HOW do we know it was sourced legitimately?

AND so the story goes.

Among the enticements for Australian Real Estate enabling the seducers in suits to sell … and it would seem sadly at the expense and access for Australians

-our first-class health care

.on real estate purchase a PR Visa and Medicare benefits

economic stability for money launderers …

WITH our local real estate markets again predicted to return to 2017 peak levels midway through 2020 ….

AUSTRALIA … A SAFE HAVEN …

Surrey Hills auction won from Wuhan lockdown amid coronavirus

Jack Boronovskis20 FEB 2020

The single-level Surrey Hills residence sold $350,000 above reserve.

A woman stuck in Wuhan has paid a $350,000 premium for a Surrey Hills townhouse while on FaceTime with her son as he bid at the auction.

The buyer, who is an Australian citizen, picked up 23 Bentley St for $1.65 million after competition from five other groups, mostly made up of downsizers and young professionals.

Fletchers Canterbury director Tim Heavyside said the purchaser had missed out on other properties and planned to downsize into the three-bedroom townhouse.

Six groups contested the auction.

“She’s not a resident of China, she’s an Australian citizen,” Mr Heavyside said. “She’s stuck in Wuhan (the coronavirus epicentre), but she still bought it from Wuhan by FaceTiming with her son.

“The fact that it was so close to her son made it an easy decision to buy that particular property.”

Mr Heavyside said Australia’s reputation for first-class health care and economic stability was helping the local real estate market grow, predicting it would return to 2017 peak levels by midway through this year.

“Australia is actually quite a safe haven for any type of nationality, particularly for people that are worried about coronavirus and things like that,” Mr Heavyside said.

“Being safe is very high on people’s list.”

The buyer was happy to pay $1.65 million to live closer to her son.

The home’s kitchen.

Workers transfer medical waste at Leishenshan Hospital, the newly-built makeshift hospital for novel coronavirus patients, in Wuhan on February 18, 2020. Photo: STR/AFP

Mr Heavyside said the Surrey Hills sale was a “representation of how strong the market is.”

“There’s a lot of buyers out there that are trading out of fear or greed,” he said.

The Federal Government’s coronavirus travel ban was last week extended to at least February 22. It does not prevent Australian citizens and permanent residents returning to Australia from mainland China.

SOURCE: https://www.realestate.com.au/news/surrey-hills-auction-won-from-wuhan-lockdown-amid-coronavirus/?rsf=syn%3Anews%3Anca%3Ahs%3Asocref&fbclid=IwAR1RoabU2wVd8hDODbAtNC7EDMcFHt9ylC9mlWfuTw0TTtaEei7B0op6jws

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RBA Tries to Explain why Sydney and Melbourne Housing is so expensive

BUT … here in fact is why!

it is curious that the RBA did not mention differences in population growth, driven by immigration

Sydney and Melbourne are growing quickly driven by mass immigration

growth is obviously fueling demand and helps to explain why dwelling values in Sydney and Melbourne have grown so much faster

university academics last month released research showing that mass immigration is unambiguously lifting Australian house prices

where the new migrant population grew by 1 per cent each year, house prices likewise rose by 0.9 per cent

house prices would have been around 1.4 per cent lower per annum; units 0.8 per cent lower without immigration [from 2006 to 2016]

specific migrant groups also had a bigger impact on house prices than others; Chinese and Indian immigrants have high rates of home ownership

immigration the major driver of population growth since the mid-2000s; immigrants more likely to move to major cities than existing residents

Why Sydney and Melbourne housing is so expensive

By Leith van Onselen in Australian Property

February 18, 2020 | 10 comments

The Reserve Bank of Australia (RBA) has released new research which attempts to explain why dwelling values respond much more to interest rate changes in some parts of the country (e.g. Sydney and Melbourne) than others:

We know that housing prices vary substantially across different parts of the country. The average price of housing is higher in Sydney, for example, than it is in Hobart. We also know that changes in interest rates have an effect on housing prices. When the RBA lowers the cash rate housing prices typically end up higher than they otherwise would have been. These two facts have been well documented, but what we don’t know is how these two facts fit together. For example, when the RBA lowers interest rates, is the change in housing
prices larger in Sydney than in Hobart? And what are the factors that explain any differences in the response of housing prices to interest rates across the country?

In this paper we examine how monetary policy affects housing prices across local areas. We explore three related questions:

1) How differently do housing prices respond to monetary policy across areas?
2) What can explain these differences across areas?
3) Does monetary policy cause changes in the housing wealth distribution?

We document considerable differences in the response of housing prices to changes in monetary policy across local areas. While housing prices in the median region fall by 2.3 per cent two years following a 100 basis point increase in the cash rate, at the 25th and 75th percentiles, housing prices fall by 0.9 per cent and 3.5 per cent respectively in response to the same cash rate increase.

What can explain these differences across areas? We find that a diverse set of forces are associated with the sensitivity of local housing prices to cash rate changes. We find some evidence that housing supply conditions matter. This is because a fall in interest rates leads to higher demand for housing. For areas in which it is difficult to build new housing – when housing supply is `tight’ – most of this increase in demand will be met by an increase in the price of housing, rather than in the quantity of housing. So changes in interest rates tend to affect prices more in areas in which housing supply is constrained, whether by geography or government regulation. But, on top of this, we find that areas with more mortgage debt, higher incomes and more housing investors also have larger housing price responses to changes in monetary policy.

Relatedly, we also find that changes in the cash rate alter housing wealth inequality. This occurs because expensive areas, which typically have tighter housing supply, are more sensitive to changes in interest rates. These differences, however, dissipate over time, suggesting any change in housing wealth inequality due to monetary policy is temporary.

Overall, this paper documents two findings on the effect of monetary policy on housing prices. First, the distribution of responses is substantial. And second, more expensive areas are more responsive to monetary policy. Housing supply conditions, and the availability of land, go some way to explaining these differences.

But there is clear evidence that other factors, such as incomes, mortgage debt and investor concentration, matter too. This supports the view that housing price dynamics are complex and that a wide range of factors need to be considered when trying to understand how changes in interest rates affect the Australian housing market.

Not a bad effort. Although it is curious that the RBA did not mention differences in population growth, driven by immigration.

As we know, Sydney and Melbourne are growing quickly driven by mass immigration:

This growth is obviously fueling demand and helps to explain why dwelling values in Sydney and Melbourne have grown so much faster than the rest of Australia:

Don’t just take my word for it. Many studies have also found that immigration helps fuel house prices.

For example, university academics last month released research showing that mass immigration is unambiguously lifting Australian house prices, thus making housing less affordable for the resident population:

https://www.domain.com.au/news/immigration-boosts-australian-house-prices-by-as-much-as-6500-a-year-study-924112/

*In cities where the new migrant population grew by 1 per cent each year, house prices likewise rose by 0.9 per cent, according to the study titled The Impact of Immigration on Housing Prices in Australia by senior lecturer at Monash Business School Daniel Melser, and, RMIT University student Morteza Moallemi.

*“House prices would have been around 1.4 per cent lower per annum, and units 0.8 per cent lower, if there had been no immigration [from 2006 to 2016],” they wrote, in the soon-to-be-published study…

“Interestingly, the effect of immigrants on different property types is different – there is a bigger impact on houses than units or apartments,” Mr Melser said.

Specific migrant groups also had a bigger impact on house prices than others, given they were more likely to buy a home, Mr Melser said

“Chinese and Indian immigrants have high rates of home ownership,” he said…

This study supports similar findings from the Productivity Commission

Click to access migrant-intake-report.pdf

High rates of immigration put upward pressure on land and housing prices in Australia’s largest cities. Upward pressures are exacerbated by the persistent failure of successive state, territory and local governments to implement sound urban planning and zoning policies…

The Grattan Institute’s housing reform blueprint also explicitly stated that “high rates of immigration” are a contributing factor to Australia’s rapid house price growth and reduced housing affordability:

Strong population growth, both from natural increase and overseas migration, has increased demand for housing and contributed to the increase in dwelling prices, particularly in our major cities…

Immigration has been the major driver of population growth since the mid-2000s… Immigrants are more likely to move to Australia’s major cities than existing residents

Why did the RBA’s research paper fail to mention this?

Leith Van Onselen

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

The property market has come roaring back to life.

The property market has come roaring back to life.Source:Supplied

SOURCE: https://www.macrobusiness.com.au/2020/02/why-sydney-and-melbourne-housing-is-so-expensive/

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Calls for Empty House Tax Review

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

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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.

Australia’s housing market was deemed “severely unaffordable” and among the most expensive in the world, while rent and house prices also went up last year.

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.”

Related: Mortgage Stress Rises as Debt Soars for Older Australians#vacancy rate#Vancouver#Affordable Housing#vacant residential land tax

AUTHOR Renee McKeown

SOURCE: https://theurbandeveloper.com/articles/calls-for-empty-house-tax-review?fbclid=IwAR32bM9jZrrvkDHuqDPbNMqTdHCeSl4fO_5i_avcg6bHhDtBwb6pKsVz2dI

COVID-19 spreads to Aussie property

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.

😊

COVID-19 spreads to Aussie property

By David Llewellyn-Smith in Australian Property

February 13, 2020 | 37 comments

Via The Australian:

Story image for 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. from The Australian

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

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.

SOURCE: https://www.macrobusiness.com.au/2020/02/covid-19-spreads-to-aussie-property/

The coronavirus and subsequent ban on non-citizens travelling to Australia from China has left prestige vendors short of foreign buyers. Photo: Janie Barrett

Owen Wilson REA Group speaks to The Business about increased inquiries from HK and China

Owen Wilson speaks to The Business

OWEN WILSON FROM MELBOURNE REA GROUP SPEAKS TO RACHEL PUPAZONNI FROM ‘THE BUSINESS’

A sharp decline in listings has seen property giant REA Group’s half year results slide. HOWEVER … in recent months there have been increased inquiries from Hong Kong and China …

AS revealed previously in October 2019 in this report the Hong Kong unrest has seen residents look to Australian property safe haven … hence the Sydney and Melbourne price hike

View:

https://caanhousinginequalitywithaussieslockedout.com/2019/10/22/hong-kong-unrest-sees-residents-look-to-australian-property-safe-haven/

DO you suppose this has something to do with Jean Nassif of TOPLACE lining up with the Ralan Group for more high-rise precincts across Sydney …. ??

PLEASE TELL OTHERS ABOUT THIS! START THE CONVERSATION … WHY BE SILENT??

The Business

Owen Wilson speaks to The Business

Updated 7 February 20202

Expires: Saturday 4 January

Share!

SUMMARY …

A sharp decline in listings has seen REA Property Group’s profits slide … revenue was down 6% to $440M taking net profit down 13% to about $153M

A 14% fall in National Listings on its realestate.com.au site was the main driver led by …

-a 17% fall in listings from Sydney

-a 16% fall in listings in Melbourne

The 30% decline in new building starts during the half year period was also bad news for the property group

DESPITE THIS …

-retained its 55 cents a share dividend for shareholders

OWEN WILSON, CEO FROM MELBOURNE

-all the indicators are that the market is in recovery mode; A big increase in buyer activity on their site

-banks are lending

-Sydney’s prices up significantly in recent months

-Sydney and Melbourne leading Australia out of the decline

-recovery in property prices giving vendors the confidence to enter the market

-new building construction down 30% nationally in the half; the peak in new development construction was 2 years ago

-a number of factors caused the decline particularly the restrictions for foreign investors; decline in new project developments for about 2 years

(Mr Owen did not refer to China’s capital controls!)

-the CBA research showed the number of dwelling constructions was falling short of population growth

A KEY COMPONENT IS CHINESE INVESTMENT NOW IN THE GRIPS OF CORONAVIRUS (CV)

-forecast there should be an inflection point in development construction in the middle of 2020

a key component in Australian housing is Chinese investment

DESPITE the grip of the CoronaVirus …

-in the half the REA Group saw 44% increase in inquiry for Australian property out of Hong Kong

-in the last 2 months of 2019 a 25% increase in inquiry out of China

It would appear the safe harbour of Australian property is even more attractive for foreign investors

-increase in listings in the half in Hong Kong customer numbers and audience despite the CV and the democracy protests

-the democracy protests do not seem to have had an impact on business

-RE Group staff work from home; work digitally from any geographic location

-bushfires in Australia; in terms of the building regulations he submitted we need to think differently about the level of forestation around housing

-most economic forecasters predict one further rate cut this year possibly two; awaiting the impact on the economy of the CV

-further rate cuts will be good for the property market; rebound in house prices; outlook much better for 2020

-largely manufactured downturn through APRA lending restrictions; uncertainty around the election

VIEW:

https://www.abc.net.au/news/programs/the-business/2020-02-07/owen-wilson-speaks-to-the-business/11945514

Sydney Harbourside property

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VIEW WEBSITE TO FIND MORE ABOUT TOPLACE, RALAN GROUP, CHERRYBROOK, CASTLE HILL AND MORE!

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Foreign Investment Review Board … the FIRB About Residential Real Estate

FIRB:  About:  Residential Real Estate

From ‘About-FIRB’

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!

Guidance

SOURCE:   https://firb.gov.au/residential-real-estate