As Canada and the UK move to restrict the affluent capital fleeing the developing world, largely because it is blowing up their housing markets, Australia will welcome it with open arms. The Abbott government is set to expand Australia significant investment visa program. It processed 116 approvals in the past year and another 486 are pending:
The review will seek ways of speeding up approvals and will consider expanding the assets the $5 million can be invested in beyond bond and commercial property funds, possibly to venture capital and start-ups.
…The review is unlikely to allow investment in houses and apartments because of the political repercussions from the fear of Australian buyers being squeezed out of the market.
…Some SIV-compliant funds have established ways for new residents to invest in established property.
…Aura Funds Management launched two funds last year and placed on its advisory committee John McGrath of John McGrath Real Estate and JLL’s Asia Pacific chief operating officer, Albert Ovidi.
The visa review was praised by venture capitalist Mark Carnegie.
He said the visas should provide more flexibility for Chinese capital to flow into Australian technology start-ups.
That would be nice and I’m all for it. But let’s face it, is that’s where the capital is going to go in the houses and holes economy? If a wealthy Chinese or Russian is looking to diversify risk away from a troubled market, is s/he going to buy a high-risk technology company or a nice and stable land bank? FIRB is already a paper tiger and making it “easier” will not help.
Yum! Australian children are delicious…
