I can see two outcomes to this interest rate rise for investors
1) rents will increase
2) Chinese money will become an even bigger percentage of ownership
So, you will have a society where the Aussie children will get to pay higher rent (I guess put 11 people in that two bedder) AND the rents will go to foreign owners.
And this does become apparent from just looking around. The building I live in, in Sydney, is very upmarket. I have been here 10 years. Building is 20 stories with 5 apartments per floor, so 100 apartments. They were about 600k 10 years ago, now they are between 1.4 mill and 2.5 mill each.
When I moved in here, most people were new Aussie retirees downsizing or 40s to 50s peak working couples. Not many children around in the building. Not many at all. There was really no foreign couples at all. Now, I would say over half the building is owned by migrants from China. Heck maybe 60%. They are paying cash 1.5 mill... no problem. They do not speak English.
Now, I dont care at all if people speak English, or where they were born. And I get along with, and play tennis with, and go to Church, even, with some of these 'new Australians'.
But my point is this: this is a Ponzi scheme. The local Australians are now priced out of the Ponzi scheme. The scheme can only keep going buy finding new entrants. I am sure, one day, when Australia learns what happened, it will be too late. I feel the average Aussie will feel cheated and tricked by their own govt. Who simply needs money from any place on earth to keep the Ponzi scheme going.
