While the RBA, FIRB and the MSMS are busy quoting one another’s obviously inadequate statistics in a splendid display of Borgesian self-referentiality, those on the ground are getting more and more concerned about the impact of illegal foreign buying on Australian realty. From The Australian:
…veteran Melbourne buyer’s agent David McRae said:
“We regularly get knocked off by certain sections from overseas and money is not an object to them,’’ Mr McRae said. “We don’t expect to win when I come up against people from Malaysia or China…Let me tell the Reserve Bank: it is a problem and it’s going to become a much bigger problem if they don’t do anything about it because the local population is being priced out…These guys really don’t understand the impact that it is having.”
McRae estimates a 10% impact on prices. That’s the equivalent the of the entire price inflation of the rate cutting cycle.
…Another long-time agent, David Morrell, said the FIRB’s enforcement regime was akin to “being slapped with a wet lettuce…The rules are so lax — it’s wrong…I think the FIRB have a fair job ahead of them.’’
The article discusses the “open secret” of the rush. It’s not even a secret as far as I can see. The entire industry is cheering it on everywhere I look, from John McGrath down it has been referred to as “unprecedented”.