Crackdown on foreign property investors

Big changes made today for overseas investors. Heres some links

» Crackdown on foreign property ownership - AdelaideNow, 24th April 2010.
» New curbs on foreign home buyers - The Australian, 24th April 2010.
» Foreigners face tighter rules on property ownership - The Sydney Morning Herald, 24th April 2010.


Yeah just for the very immediate future I'm concerned about this one myself as I just sold something to a UK buyer . I won't go into the detail but it has about 3 wks left to settle and I really need it to go through. Signing this wk
I hope the new rules don't stuff up the sale for me - I wonder how long they will take to come in !

But long term , I think a crackdowns a good idea mainly b/c of our prices and the added competition people starting out or renters, just don't need right now.
How do other countries handle this sort of thing , what are their rules I wonder ?

Cheers
 
This won't make one a difference in the 200-700k bracket where the competition is the strongest. They buyers are mostly local who have PR.:D

The foreign buyers in the $1m bracket mostly.....
 
Something came out recently that foreign investors make up about 1% of the market. This is hardly going to make a substantial difference to the market.
 
Something came out recently that foreign investors make up about 1% of the market. This is hardly going to make a substantial difference to the market.

Funny how 'they' can quote a % when the requirement to report and consequently record no longer existed.

I think we now have to wait to see if there is any effect on the property market. I suspect that there will be an effect.

Cheers
 
On the flip side, there's been no formal study that foreign investors are driving upt the market either. A lot of what's happening could be speculation and media attention.

I have seen some evidence of it. Some people are paying too much for properties, bidding well beyond reasonable expectations of value.

Whatever the case this is likely to be a tempory thing. In the 90s there was a lot of foreign investment on the Gold Coast. Then there was a collapse. Most of the people who made money out of the whole thing were Australians.
 
Although it is easy to say they may be paying more than the value a property is worth but whose value is that?

A Japanese business man with a spare 1million has a choice of putting the money into a bank and getting around .025% return or buying a 500K property for 700K and getting a 5% or more + capital growth.

The value is on the return and not the price and is different.

The same situation applies when I buy a car in Japan for nearly twice the price it is worth in Japan because it will return up to 4X the price in OZ.
 
The value is on the return and not the price and is different.

The same situation applies when I buy a car in Japan for nearly twice the price it is worth in Japan because it will return up to 4X the price in OZ.

If you know there is a ready market to pay 4x the price in Oz there's very little risk to your capital so it's a good business decision. The businessman's risk is higher than yours because he's risking his capital. There is not a ready market to pay him $700k for a $500k house if he needs to sell. It may be unlikely that he would need to sell, but it's a risk nonethless.
 
Although it is easy to say they may be paying more than the value a property is worth but whose value is that?

A Japanese business man with a spare 1million has a choice of putting the money into a bank and getting around .025% return or buying a 500K property for 700K and getting a 5% or more + capital growth.

The value is on the return and not the price and is different.

Well, before earning any 5% on 700k (would be 35K yield before expenses), he is losing on the spot 200k or about 5.5 years of yield. Any sensible businessman, or other mortal would reconsider...


The same situation applies when I buy a car in Japan for nearly twice the price it is worth in Japan because it will return up to 4X the price in OZ.

It's good you have this interesting niche, but why don't you buy them the local price? Why paying twice? Just curious!
 
Ah well, problem solved - the last of the groups forcing up property prices will be thrown out of the market. Then prices can settle down to normal levels, now that foreign buyers are out, FHB'ers are out (apparently) etc.

This wouldn't have anything to do with the fact that house prices are making big headlines at the moment and the govt. needs to be seen to be 'doing something' about the problem for the poor voters...*ahem*...battlers. :rolleyes:
 
Yeah just for the very immediate future I'm concerned about this one myself as I just sold something to a UK buyer . I won't go into the detail but it has about 3 wks left to settle and I really need it to go through. Signing this wk
I hope the new rules don't stuff up the sale for me - I wonder how long they will take to come in !

But long term , I think a crackdowns a good idea mainly b/c of our prices and the added competition people starting out or renters, just don't need right now.
How do other countries handle this sort of thing , what are their rules I wonder ?

'The crackdown is really good, as long as it doesn't affect me.' amirite?
 
Spark, will try to explain it better. There is the local price that Japanese buyers will pay and the price foreign buyers will pay. Foreigners buyers know they will get a better return than their Japanese counter parts and often pay up to twice the normal Japanese price to get the right vehicle. Some vehicles have had prices pushed up so much that Japanese buyers are complaining and trying to restrict foreigners from being allowed to buy cars as they can't buy the cars for their own domestic sales.

Spark,Jade,

There is no mention of selling so no loss of 200K as in your scenarios. There is nothing wrong with paying more money than a property is worth if your aim is to hold and not sell especially if the return is more than you would get elsewhere.
 
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