Foreign buyers blow out the housing bubble by Adam Schwab anyone who dismisses the fact foreigners are buying australian houses in droves...and competing with mums and dads and fhb's....and fuelling the housing shortage....is like having their heads in the sand....
note...its not the same as the Japanese in the 1980's...who were buying commercial properties and then went broke....
some extraces from the article.....
For the remainder, the developers would have to convince Australians to part with their hard-earned to purchase properties off the plan in the vain hope of riches materialising before settlement (the new laws now allow developers to sell all properties in a development off-shore). Under the new laws, developers could sell 100% of new developments off-the-plan to overseas buyers who tend to pay a premium for Australian real estate, possibly because they are uninformed, but also, because Australia involves far less “sovereign risk” than many overseas jurisdictions.
Another critical change introduced by the federal government was a relaxation on the acquisition of established properties. Under previous legislation, holders of student visas were only able to buy a property that cost less than $300,000, since late last year that limit was removed. Further, foreign-owned corporations are now permitted to purchase properties for Australian staff
The effect of the law changes should not be underestimated. The Sunday Age this week reported that Melbourne agent JP Dixon (based in luxurious Brighton in Melbourne’s east) noted that more than 40% of sales were made to Chinese interests. An agent told the paper that “[overseas investors] buy them to land bank, not to rent the, out. The houses just sit vacant because they are after capital growth.”
Such is the federal government’s fear that a residential property slump will be a negative at the polls, they have introduced a policy that exacerbates Australia’s housing shortage and prolongs an asset bubble. According to FIRB data released last month, foreign investment in Australian real estate shot up by more than 30% this year to $20.4 billion.
