Concerns over foreign investors pricing locals out of home ownership appears to be boiling over, with a group of Liberal MPs raising the alarm. From The Canberra Times:
Fiona Scott, who holds the bellwether western Sydney seat of Lindsay [said] “Prices are increasing at a rate of knots and it has become challenging”…
Liberal MPs in outer Melbourne raised similar concerns…
Alan Tudge, a parliamentary secretary to Prime Minister Tony Abbott, holds the seat of Aston [said]…”There is deep concern about people being priced out of the market here”…
As in neighbouring Liberal electorates, he said people were concerned about the upward pressure to prices applied by foreign investment.
Liberal Jason Wood, the member for La Trobe, raised the same issue.
“I have heard from many of my constituents who are concerned that their children won’t be able to buy their first homes because of foreign investors taking up too much space in the property market”…
In nearby Deakin, Liberal Michael Sukkar recently held a local forum on foreign investment in property and its effects on house prices in the seat of Mr Hockey’s parliamentary secretary, Kelly O’Dwyer.
Yesterday, Treasurer Joe Hockey admitted on 3AW that he himself had reported a dodgy looking sale of a heritage listed home to a foreigner in his Sydney suburb of Hunters Hill, only to find that FIRB had approved it on “spurious grounds”:
“I referred one of my own neighbours and found out they had got approval on pretty spurious grounds”…
“They bought a property on the basis that … they were going to add to the housing stock by building a granny flat out the back or something, and I thought that’s ridiculous”…
While no reliable data is available, it would appear that foreign investment in Australian real estate is now widespread, at least in the key bubble markets of Sydney and Melbourne. It is also becoming a hot political issue, which requires a definitive government response.
Specifically, the government needs to deliver to the electorate a series of forced sales and punishments – some ‘heads on pikes’ – in the lead-up to implementing its new, tougher, foreign investment regime on 1 December.
Only then will the electorate be satisfied that the Government is taking the necessary action against foreigners illegally pricing locals out of housing.
Given Bozo Joe and Banana Tony are concurrently up-selling the bubble, it appears the Government has a strategy of blaming foreigners for high prices while letting everyone else off the hook.
unconventionaleconomist@hotmail.com
Update:
I have received a number of complaints from readers regarding the title of this post.
“Yellow Peril” refers to the racist overtones that ran through Australia during the White Australia Policy. The Government is displaying these again by blaming the Chinese for unaffordable housing, whilst ignoring entirely home grown causes like negative gearing, CGT concessions, supply-side bottlenecks and the like.
It is the Government that has scapegoated the Chinese, whilst giving the local causes a free pass.
This is the point this article tried to make, which I thought was clear by the last few paragraphs. Sorry if this was not made more clear.
