technobabble66 said:
I'm not sure about this either - pretty certain i know a few people in the real estate industry or from Asia that have numerous stories about non-Australian citizens buying residential land quite freely. That link basically just says they all get reviewed. I'm sure they do, then get accepted about 5.3 secs later. I'd suggest that the agents handling the sales might have a vested interest in knowing how to fill out the applications to ensure they get accepted - 2% commission on a $20mill block of flats is a decent incentive.
And how much of it's dirty money? I coincidently was told yesterday a friend of my FIL sold an investment property to a newly arrived Chinese couple for $1.2mil. They paid cash. The father of one of them is a mid-level bureaucrat in China - and the money wasn't from his weekly wage. That's not the first time i've heard that kinda thing. Hey, i'm sure one of them's a student, so it's all ok? Well at least there's a chance that the couple will decide to stay in Australia & become citizens.
I'm ok with some Foreign Investment. However, i'm not convinced of the overall benefit to the community in the long-term with widespread foreign ownership of residential land. I'm happy for anyone of any background to come here to live, but kinda think residential land should only be going to those with a real stake in our country, at least a PR, not just some cash.
I'm sure it's more complicated, and there's probably good reason to have a little foreign ownership of residential land, but to me it generally seems to be the height of stupidity to allow such open freedom or lame obstacles to foreign ownership of this precious resource.
Sorry for getting a little ranty - but the residential thing really gets my goat.
There is no real benefit to the community if foreign owners of residential property aren't fully embedded in the local economy. The one thing they are certainly doing is inflating prices -- speculating up the value of land, then taking their profits home. In the end all this does is deflate the value of everything else in the local economy (relative to its value in the absence of the asset bubble), most notably incomes. We feel richer because our homes are worth half a million instead of 100k, but this wealth is an illusion unless you cash out of the system (i.e., move to a cheaper market).
The counterargument that foreign investors are fueling the economy by providing capital for construction, maintenance, etc, is also an illusion: this supposedly beneficial capital flow would be greatest if every property owner were non-resident, but then all the locals would be sending their income to foreigners as rent instead of accumulating some principal here, where at least it would protect them from higher rents in retirement.
Foreign investors are keen on Aussie property for the same reason they're keen on US government bonds -- it's a fairly safe investment; i.e., it's a fairly safe way to turn money into more money without doing any actual work. As long as immigrants keep pouring in here, which they will as long as Australia remains far wealthier than the average country, residential property will always be biased in favour of demand over supply, and prices will rise as high as speculators (foreign or domestic) want them to.
Governments, left or right, will never do anything to change this -- if they shut down immigration, the economy would lose a heap of cheap labor, and if they blocked foreign investment, the property bubble would collapse. In either case the economy would eventually be fine, but only after a long period of painful readjustment that would cost the pollies their jobs. And the lesson would still not be learnt. See: USA, 2007-present.
