More than 64% of respondents cited foreign investors as the main reason for rising house prices in Australia, according to a newly released study published in the Journal of the Australian Geographer.
The study makes it clear that Australians have a deep-seated fear that property prices are being driven skywards by foreign investors. Australians also assume that large portions of available property are being acquired by foreign investors, mostly the Chinese.
More than half of Sydneysiders believe government regulation of foreign investment is ineffective, and that rich Chinese investors disproportionately influence the market.
Dallas Rogers—senior lecturer within the Faculty of Architecture, Design, and Planning at the University of Sydney—said this is the first time individual opinions of Australians have been recorded about the impact they believe foreign investment is having on their communities.
“The recent federal budget saw the government come down hard on foreign investors, which demonstrates the dilemma that the government is facing as it attempts to manage foreign investment alongside a disenchanted Australian public,” Rogers said. “Historically there has always been cultural tension over land and home ownership in this country that began with the arrival of British settlers in the late 1700s, the Chinese gold rush in the 1850s, and the White Australia policy in the early 1900s.”
The 2000s saw “significant societal change” in Australia due to economic, political, and social forces from the Asia-Pacific region, said Rogers.
Home prices surged nearly 20% in Sydney and 15.5% in Melbourne over the last year, according to CoreLogic.
In an attempt to fix the nation’s housing affordability crisis, the Turnbull government is taking a stricter stance against foreign investors who snap up property and then leave it vacant. The recently-announced 2017-18 federal budget brought in a new foreign investment levy of at least $5,000 a year on foreign investors who fail to either occupy or lease their property for at least six months each year.
The Turnbull government has also restored a requirement that prevents developers from selling more than 50% of new developments to foreign investors.
The study, which polled almost 900 Sydneysiders aged 18 to 65, posed questions about housing affordability, factors influencing house prices, views on foreign investment, and the perceptions of Chinese investors.
Despite widespread assumptions about the negative effects of foreign investment in Australia, hard data doesn’t match these assumptions.
A study conducted last year by National Australia Bank showed that Australian residents and investors still make up a greater proportion of real estate buyers in the country. A mere 14% were foreign investors.
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