7.30 Report dissects foreign property debate

By Leith van Onselen

If you get a spare 8 minutes today, make sure that you check-out the above video segment from last night’s 7.30 Report,examining whether foreign buyers are helping to push-up Australian home prices, and in the process crowding-out first home buyers.

The segment features a wide array of industry participants and commentators, and provides what I believe is a balanced view.

Gone is the ruse that foreign investment is not a significant factor, with virtually all participants acknowledging that there is illegal activity going on, it is having a material impact on prices, and Foreign Investment Review Board (FIRB) monitoring has been delinquent.

An auctioneer named Lee Salce is particularly frank stating:

“Where they [foreign investors] buy, usually the market goes up considerably – anywhere between 10-20% above market. [The money’s coming] predominantly from China. I say that percentage wise, if we were to sell properties to offshore people, I’d say 70% would be owner-occupied and 30% would be investors still living overseas”.

Salce also claims that some homes snapped-up by foreign buyers are sitting empty, adding to shortage concerns:

“There are buyers that tell us they are moving in. And then we drive by 3 or 4 months later and there’s no one in the home. We can’t control that”.

Liberal MP, Kelly O’Dwyer, also chimes in claiming:

“There needs to be a national register so that I can answer the question: How much of our residential retail market is actually owned by foreign investors? At the moment today, I cannot give you that response”..

The evidence is in that the FIRB has not been doing its job properly. The FIRB has not had one prosecution since 2006. They say that that is to do with the fact that people are being far more compliant. I think that defies credibility…

I do think it’s a bit of an excuse, a bit of a cop-out for the FIRB to say that it is all a matter of resources. I think it is all a matter of leadership. And a matter of attitude.

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Unconventional Economist
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    • How does the saying go again…?

      Something about a fat lass who likes to sing, requires more than 1 deck chair to park her big caboose on once the music stops………Or something along those lines 😉

    • I must confess that when I sat through it I still thought it was softer on the issues than I would have been.

      It went long on the FIRB issue and gave KOD airtime, but without her really suggesting she was actually going to do anything of substance.

      For mine the most honest part of it was the guy from RP data trying to at least refer to some of the risks in the market.

    • +1 awesome!

      Go media – how quaint of you to report a real issue for a change! Keep it up and I’ll lose the attitude.

  1. Uranium GeoMEMBER

    Yes finaly the cat has been let out of the bag. Perhaps there will be a more informed conversation on this throughout the media but I wont hold my breath for any measurable change in the near future.

  2. Fascinating! I’ve been “Blocked”….Oh well…..
    Nope! Looks like this post got through. Must have been too terrifying – that bit I penned about the future of your property market!
    Good luck…..

    • Fascinating! I’ve been “Blocked”….Oh well…..

      I’ve found when that occasionally happens, you can make a simple post with just a sentence or two in it, then go back and edit that post to add whatever you want.

  3. O’dwyer is undermining the greater good…she’ll be given the talk soon to keep quiet by other hidden forces

    • Mining BoganMEMBER

      Dunno. If there’s one thing this mob likes it is sinking the slipper into vanquished foes. Her eyes will light up at the chance to point the finger at that idiot Rudd for easing the rules to let dirty foreigners in.

      Seems she’s so excited at the chance of grave-dancing that she’s forgotten the first rule of politics. Make property inflate.

    • The feeling is mutual.

      Just used car salesmen who will go back to peddling their death traps once the market crashes.

    • They are even worse than banksters, oh, maybe there is no one worse then banksters, but still they are like hyenas, disgusting.
      Had an acquaint who was a real estate and I couldn’t keep the relationship with the family, I was too much disgusted.

    • I think you mean ‘natural’. I have a natural dislike of them too…..along with their inbred cousins, property developers.

  4. ONLY 4.5%…..WTF?

    ONLY 4.5% sold to foreign buyers, while we populate at over 2% a year…Our politicians should be put in jail.

      • Yeah…How would we know when the FIRB refuse to even be interviewed…Is this really happening? A public department isn’t answerable? What are we becoming?…..

        Unless we resist the BS coming from government we will give away more and more and more until Australia is unrecognisable…..This is fcking garbage we’re putting up with.

    • Lawless misrepresents the data.
      4-5% is not the percentage of dwelling sales to FN’s, it is the percentage that “self-report” to the FIRB.

      It is a sham.

      The 2014 NAB residential property survey found that 8-10% of the sales of EXISTING dwellings were to foreign nationals.

      That equates to 40,000-50,000 sales per year.

      The FIRB recorded 5018.

      • There should be a Royal Commission and criminal charges against Australians involved, and of course confiscation….

        Like I said…What have we become? This is a disgrace that Australians are watching this happen, we should be rioting.

      • +1 Rich
        There is a ripe field for criminal records, confiscations and other penalties to be brought about. Might even balance the budget with the proceeds.

      • @rich42, we are servant to the new wealthy master. It is disgrace, but do we still have national policies, which serve the people? Abbot maybe thinks that allowing only the rich corrupted Chinese to buy our houses and land, but stopping the boats with poor people, he thinks maybe Australia will be richer at the end. Maybe it will be for some small elite, but young Australians will be poorer and enslaved by FIRE.

      • Strange Economics

        + proxy buyers through local agents /accountants/lawyers.
        These agreements don’t hold legal force, but family and friends network force.
        If you are coming from countries with a corrupt legal system then these networks are needed to invest.
        Also if you are laundering money out then its best put in someone else’s name, in case they come after it !

  5. I cannot see how there will not be a major backlash over this. Then confiscations will begin after much wailing and gnashing of teeth.

    • If it’s not in the mainstream media it doesn’t mean much.

      Everyone is having a spew over Muslims. So boring.

      I think most people have known about this treasonous situation for at least a year. Boomers couldn’t care less, and any younger specufestors and mega mortgage mugs like it too.

      I’ll be very surprised if Kelly does anything.

      • Rent Seeking Missile

        Plans to kidnap punters, take them to Martin Place, drape them in the black flag of ISIL and lop their noggins off are not a ‘distraction’.

      • Plans to kidnap punters, take them to Martin Place, drape them in the black flag of ISIL and lop their noggins off are not a ‘distraction’.

        They are when they’re not based in anything other than some journo’s (or Government agent’s) fevered imagination.

      • The Australian public is likely to vent their anger on fellow Asian Australians who are citizens of Australia…while the rich foreigners who illegally purchase Australian property are living in Mansions overseas…tis fucked.

      • Plans to kidnap punters, take them to Martin Place, drape them in the black flag of ISIL and lop their noggins off are not a ‘distraction’

        Correct this is very serious, who do they think they are? The RBA committee to f#ck the nations savers? Of course when RBA does it the polite term used is “haircut”, pity the head gets cut too…

  6. If the only solution is a tax on foreign buyers, it will become yet another revenue stream that the government is addicted to, and will do anything to promote.

    They need to think specifically about specific objectives, namely:
    – improve data and transparency so that Australians actually know what is going on
    – disincentivise properties sitting empty
    – promote foreign investment in new builds but disallow it in existing property, just like virtually every other country in the world.

    I fail to see how increasing tax/stamp duty on foreign buyers achieves any of those objectives, apart from maybe providing a bit of funding for the FIRB’s enforcement activities.

    Will be interesting to see what O’Dwyer’s review comes up with.

    • “yet another revenue stream that the government is addicted to, and will do anything to promote.”….

      Great point.

      • If the revenue raising was based on prosecutions for illegal transactions, forced sale of the property, and a large accompanying fine or forfeiture of assets, that would do the trick.

        Fines/asset forfeiture would pay for the cost of investigation, and it would create a negative feedback loop – illegal transactions increase, prosecutions increase, illegal offshore buyers get scared, illegal transactions decrease.

  7. Just listen….

    hear that roaring silence all these years from PARLIAMENT, the ultimate institution of treason, filled to the brim with traitors, happy to sell out their fellow Australians for number one.

    All that nearly all parliamentarians care for, apart from their undeservedly over-generous pay, super and perks, is that their property investment portfolios go up and up and up in value no matter how it is achieved or what harm that does to the economy and least of all to the citizenry they supposedly serve. These treasonous clowns very happily sell out their fellow Australians for number one, themselves.

    And of course their parties are heavily dependent on FIRE sector donations. As they say, if you want to understand why, follow the money!

    • They are just a reflection of the people. Who have taken great delight in seeing their piece of shit properties become $1m+. I think it’s because it helps them forget what bogan rube shit they are.

      • Bluey, nearly everybody loves to see the price of what they own go up and up. In my street, a basic weatherboard goes for over one and half million and we don’t owe a cent.

        Trouble is, this is a clear sign of a completely dysfunctional property market that is doing enormous damage to the productive economy. If people really understood what it means, they would be gnawing their fingernails with fear. Fortunately, they have the soothsayers in government, the public institutions and the mass media to put them soundly to sleep. The blame for taking us down the garden path to the very edge of the cliff goes to those who run the show, parliament. The fools were counting on the mining boom going on and on and on, against all historical experience.

        IDIOTS and TRAITORS !

      • Jacques I think at some point the market became a bubble that no one wanted to oversee destroying. Probably around 2008.

        Imagine the media. “PM x destroys Australian housing market, takes the banks with him/her, scum of the earth!”.

        The thing is it’s working, for now, and has for ages, and it might work for decades to come.

        Just playing devils advocate is all.

        Yeah, idiots and traitors, just like basically everyone I know who often have smarmy schadenfraudish grin on their face about it. Absolute scum.

    • Every government is a political organization of the most economically powerful social group, which today means it serves only FIRE.

  8. “The Chairman of the Foreign Investment Review Board wasn’t available for interview …”.

    Is Mr Wilson ever available?

  9. slightly_perturbed

    I want a job with FIRB. Those people have it sorted. Screw working for the council, even with council you have to do some work sometime, but FIRB takes the cake. They have done sweet f**k all since inception and now they are posed to get even more $$ ?!
    I really want too see in black and white somewhere, printed, what are those guys salary packages.

    I remember a few days ago some Ukrainian MP got chucked into a wheelie rubbish bin by a mob. Certainly makes my hands itch.

  10. reusachtigeMEMBER

    Stop whining! Foreign investment in existing housing is excellent for Australia because it helps increase the profits of all housing investors!!

    • You gotta to be kidding yourself that property values increasing helps you and your wealth….wait until the market slows and the same foreigners will have washed their dirty money from overseas and sell up and move the cash to somewhere else….this is just musical chairs but with one difference – locals fight for the last chair while the foreigners fly out to another country leaving us and our property market in the crap…..

    • Rent Seeking Missile

      Yep. We should recognise them in the Queen’s Birthday and Australia Day honours lists.

      Thank god Tony brought back knighthoods.

  11. Strange times , the ABC doing a story on the Yellow peril of Asian invasion!!!

    Never thought I’d see that day.

    I think the fact that my fibro shitbox at Ermington is worth a million bucks is wonderfull !

    Thanx China, I can retire to the central coast in comfort.

    So to all you I wanna house People , I say stop your whining and go buy some IPs.

    You can’t lose!!!

  12. Great start but won’t go anywhere unless MSM outlets like Today Tonight or A Current Affair get a hold of it and promote it as the saviour of Australian house prices.

  13. Good to see Hugh Pavletich and PhilBest all over this post, raging for lower property prices on behalf of the little guy ……

    The silence is deafening.

    • I appreciate that mice have an unfortunate history with traps but that is no reason to be laying bait on all the threads.

      • It’s not baiting. The point is they don’t give a damn about this stuff, as evidenced by their absence. It’s not good for the bottom line….

  14. The first Auctioneer off the ranks is a retard. Of course there’s heaps of Australian buyers competing… cause we’re in Australia!!

  15. We’re going to see a lot more of the blame being shifted to the bogey man – “foreign investor”…I have a feeling they’re never going to release official data. Because keeping the foreign ownership figures hidden allows politicans to avoid making any real policy changes like e.g. getting rid of negative gearing etc and gives them the option to simply blame foreigners.

    Isnt that the Australian way? Whenever politicians have to make hard decisions, they weasel their way out of it through shifting blame or appealing to the xenophobia of their nation’s citizens…

    • If they have any stats, they’re only of use in the toilet. All I can say is that the number of empty houses in my area (one of Melbourne’s wealthier suburbs) has exploded since Rudd “relaxed” the rules.