No Evidence of Foreign Buyers: The Sunday Age

[Ms Jade]

On the original question, was there an increased incidence of foreign nationals bidding up prices in inner city Melbourne 5-6 mths ago?
My answer is yes, and I do know a REA in Toorak who spoke to me about it at the time. However, my only evidence is of particular property in particular inner eastern suburbs. It does seem like this resulted in broad hysteria, and was applied to the Melb resi market in general as further proof of lack of affordability for poor FHBs. I suspect there was never much foreign interest in FHB-dominated suburbs.

 

[ldriver]

We looked in Boroondara, Stonnington & Port Phillip for about 6 months- for a good house, the competition was from expats coming home.

I guess I would look like a "foreign buyer" by the basis of appearance...that is, until I open my mouth

 

[Deltaberry]

As I'll say again once the foreign investment rules were tightened, Melbourne property prices stopped increasing by as much as they did. When Rudd bought them in, Melbourne property priices had quite a large increase.

Is this absoulte evidence that foreign buyers were driving the prices in Melbourne? No. However I believe this is circumstancal evidence that foreign buyers were driving property prices in Melbourne.

As for The Age, it has a left wing bias in my opinion. It's more likely try blame unaffordability of property (if we have one) on negative geraing, then foreign buyers. I'm sure if the Herald Sun did the investigation it would have found amble evidence of foreign buyers manipulating the market (Herald Sun has a right wing bias in my opinion, which I also wouldn't fully trust).

Also the article is only looking at what has happened since the rules have changed.

This is as circumstantial as anything.

When Rudd brought the rules in, the world was falling on its knees and equity markets tumbled. Since Australia was shielded to a large extent, investors looked around and thought "hey houses aren't that bad, they didn't crash after all." So they all got on board. Prices go up. The rest is history.

Why did prices then stabalise when foreign investors were effectively banned? Because they've already gone up a lot. Yields were and still are out of whack, inner city is selling sub 2% gross yield in many silly 2-bedroom terraces. Even if you allowed foreign investors to buy here now, I'm sure they won't be doing so...

In any case I'm sure foreigners weren't looking at the newly established suburbs or inner city (ie within 2-3km) - most accusations relate to blue chip areas (the 10km ring) such as Kew, Hawthorn, Camberwell. The appreciation of other suburbs was driven by local investors. I certainly hardly saw any foreign-looking people when I was in Carlton, Nth Melb, Richmond etc. But then again the white guy who bought the place might've been an American... as said I should've calld FIRB.

 

[equitymate]

I agree with the points about people shouldnt draw conclusions of nationality based on race.
You can certainly understand the hysteria from FHB who genuinely missed out to 'foreign investors'. The crux of the problem is it aint a level playing field if locals have to compete with outsiders who have made or borrowed their dough in more favourable circumstances, though the same could be said about expats.
Huge taxes and complience costs for those trying to make it in our 'fair go' society.

 

[Aaron Sice]

We should ban all white and Asian people me thinks... that should address the affordabiltiy crisis

ssssh! don't say that too loud, a Labor politician might hear you....

 

[Aaron Sice]

You can certainly understand the hysteria from FHB who genuinely missed out to 'foreign investors'.

fug the "fair go".

i will sell my property to who has the most money.

who would you rather sell to? an FHB with all "dad's building inspection conditions" and subject finance, or a cash offer from someone with a Vietnamese surname?

the "fair go" can go jump.

 

[equitymate]

I was not talking from a selling perspective.

 

[Aaron Sice]

I was not talking from a selling perspective.

2 sides to every equation - for every buyer there needs to be a seller.

which buyer is the seller going to sell to?

 

[Deltaberry]

ssssh! don't say that too loud, a Labor politician might hear you....

Oh sorry.... shhhhhhhhhhhhhh... it wasn't me

 

[Thrawn]

Why would a foreign investor break the law to buy a property here ?

You'd think that they'd be in danger of having their property repossessed by the govt and sold under their noses.

 

[.toe]

Precisely. Also you'd think that any investors willing to spend outside their own country would be reasonably well informed & the prevailing information about Australian property overseas has been that we are in a bubble. I think that an OS investor would've been extra well informed to know that Aussie houses would be bouyed by the FHOB during the GFC.