Depends what you define foreigners as. Read the definitions on page 1 of the report. Also new builds (not sure if it's apartments only?) aren't required to register. Neither are residents. It's well known that there's all kinds of back doors and loopholes where people use relative residents as proxies.
Even at it's peak (I'm having trouble finding references), before the FIB, foreign buyers only made up 10% or so of buyers. It's probably similar today.
Foreign buyers are a pretty convenient scapegoat everywhere property prices are rampant and if foreign purchases are banned it's just immigrants instead. The truth is, if you want to be angry at someone, it's probably the local population doing the overwhelming majority of the damage
Right! That comment is trying hard to downplay it, but 10% of sales being to foreign buyers is a massive amount.
And as they pointed out, there are all kinds of loopholes, backdoors, proxies and purchases that doesn't have to be registered. So the actual amount of foreign buyers is probably quite a bit higher than what's reported.
Not so much failed sales but the additional competing market, as only 1 ever makes the sale, if 10% was the figure of contracts signed, it’s not accounting for how many might *more* be adding pressure to the market. You could have 4 foreign buyers vying for a sale but only one makes it through.
I actually think it is significantly less:
https://foreigninvestment.gov.au/sites/foreigninvestment.gov.au/files/2023-10/res-insights-report-2021-22_0.pdf
Exactly it's based on them registering foreign ownership with external banks. That is how I read it. If they pay cash and don't register they aren't counted. It's in the fine print too, and you would think the correct methodology is one of deductive logic not inductive.
Especially if it's year after year.....
If you have for example 1000000 houses in the market with 100,000 being sold every year then if 10,000 are being sold to foreign buyers every year then year after year the amount of property siphoned away from the local population is huge...
Of course some foreigners would be selling/moving so it's not that clearcut but still...
I was making an example - and not a good one at that...
Over 10 years the housing stock would increase and some foreign buyers would stay so they become locals but still the point was that it's a cumulative affect of external money being pumped into a system and must have some impact.
"*external money being pumped into a system and must have some impact.*"
At the numbers of properties recorded by FIRB, the "external money" would not be having a noticeable impact.
Lol are you for real... The FIRB doesn't have a clue what's going on... Nor do they have the resources to police this.... With the various loopholes etc...
https://www.abc.net.au/news/2014-05-30/firb-lacks-resources-to-enforce-foreign-property-buyer-restrict/5489554
I want to know what effect on inflation this has. That driving up of house prices and subsequent selloff must be 'producing' a shit ton of aussie dollars that didn't exist before.
It would all be hidden in the fractional reserve banking, so very hard to see but once those dollars are created, they're not destroyed easily without a big correction, which hasn't happened ..yet?
haha, exactly. Classic CPI defining inflation is quite possibly the achilles heel of the whole economy.
Where are we keeping track of the endogenous money?
I did mention it was an off the top of my head number. Very different to from the ass.
The real number is not going to be that far off but you're free to go and find out the real number instead of wasting everyone's time whinging about it
> I did mention it was an off the top of my head number. Very different to from the ass.
it's exactly that.
> you're free to go and find out the real number instead of wasting everyone's time
that's literally you with your made up numbers.
> Three years after construction finished on the most expensive high rise development in Queensland's history, hundreds of its luxury beachfront apartments remain empty — and most of them are not for sale.
https://www.abc.net.au/news/2023-09-27/jewel-development-surfers-paradise-apartments-housing-crisis/102412680
yep, look at those big apartment blocks at night and see how many have no lights on... now i get people are out, sleeping, watching pornhub with the lights off.... still that's a lot of places with no lights on
Yes. That is correct. This single apartment building is causing the housing crisis. And overseas too. And is almost single handedly responsible for global warming.
Mate, It’s just an amazing example of land banking, where building an entire, luxury apartment block, at great cost, finds the developer making more money by *not* selling it. Things are that crazy.
I think that number is based on this NAB [survey](https://business.nab.com.au/nab-quarterly-australian-residential-property-survey-q4-2023/).
It shows about 10% of new properties being bought by foreigners and about 5% for established properties.
I can’t find any information on its methodology or definitions though, so I’m sceptical of taking it on face value. Page 12 of the PDF report only says:
> Around 300 property professionals participated in the Q4 2023 survey
So it’s just as likely to be numbers based on 300 real estate agents.
I'm inclined to trust the FIRB more, seeing as they are the one doing the actual approvals. Until someone can show me another set of verified data, I'm not sure why we shouldn't be using the government's data.
The only caveat in my view is that the latest FIRB report is based on FY22, which is almost two years old, and it was during a time when some covid restrictions were still in place.
I found this:
https://foreigninvestment.gov.au/sites/foreigninvestment.gov.au/files/2023-10/res-insights-report-2021-22_0.pdf
Looking at the 2021-2022 purchases of new dwellings, minus the sales of new dwellings, there were about 1,200 new dwellings reduced from supply of new dwellings by foreign owners purchasing them.
So… 1,200/??
It’s going to be a very small percentage.
I suspect that, anecdotally, people think anyone with an accent is a non-resident.
I wasn’t aware of back doors, does this require complete faith in your proxy? And either way how can the first two links I found get the numbers they have if it’s all meant to be untraceable?
Wait do you mean permanent residents who were born elsewhere aren’t required to register either? Well of course not! They live here. If I told my dad he couldn’t buy a house here he’d have gone back home to his sheep. I’ll give you a clue, he’s not Irish.
Proxies are usually children but also other family members. I doubt that someone's going to get a random person to do it.
Any resident, temporary or permanent can buy property without going through the FIRB so all in all that's a lot of exceptions. Including sheep lovers. It's not that hard to get if you've got the money so the numbers you gave are really the exception in terms of "foreign" investors
> if you are a foreigner buying existing residential property, chances are the application fee and foreigner surcharges will wipe out any potential gain.
Not if the whole purpose is to get your money out of your country and into Australia
> Family members also get caught in the FIRB definitions even if you think you are being sneaky by forming loads of trusts
Not if you give your relative your money and he buys it in his name with no record the money came from you
I didn’t mean a random person, that’s just crazy. I meant a loved one. People screw over their siblings and parents all the time, especially when their parents are rich enough to spoil them.
That’s not true, about temporary residents I mean. They are almost always allowed to buy a house to live in but they always have to apply.
> always have to apply
More complex than that. Sometimes they do, sometimes they don't. Exactly why I'm trying to impress the point that a lot gets through the cracks. Pretty sure if you delve into the application data it's not people buying a house to live in, it's people buying farms or subdividing blocks etc.
As someone currently going through the process, married with my australian partner and currently awaiting PR approval, FIRB isn't required for us to buy our PPOR (NSW).
The extra 4% surcharge does put a lovely dent in our budget though...
…and if a foreign person is a beneficiary of that trust, the trustee needs FIRB approval. This isn’t way to get around the law.
I realise your point is that you can hide ownership this way, but to do so the trustee would need to sign a series of false declarations when acquiring the property.
>Even at it's peak (I'm having trouble finding references), before the FIB, foreign buyers only made up 10% or so of buyers. It's probably similar today.
That hides a lot of nuance though, firstly because there is estimated to be a hell of a lot of foreign money that gets funnelled through local intermediaries due to our exceptionally lax laws controlling money laundering through real estate.
Secondly because the property market is heavily segmented and foreign money is not equally distributed across those segments. If you are trying to buy a certain type of property in a certain geographic area then foreign money can be huge factor.
It is the same with all the other factors (lack of housing stock, limits on development, immigration, investors, vacancy rates, geographic dispersal of employment) - they all affect certain segments of the market far more than others. It's what makes solving the housing crisis so difficult - there is no one-size-fits-all solution.
It's not the "local population" causing the problem. Well unless you count the fact that we keep voting for the same major parties.....
The problem is government restriction of supply going on for decades. Local , State , Federal all have failed to just let the market build housing.
Putting my hand up because I immigrated at 9, became a citizen at 15 and now own a house....so I guess I fit the bill haha.
In all seriousness though, the vast majority of foreigners in Australia are students or people on a temporary working visas. These people aren't usually buying houses, nor is it that easy if you're on such a visa.
Mainly, the housing market is being driven up by growing demand for rentals, buyers with the bank of mum and dad, and a large cohort of boomers owning several investment properties. It's not just the rich boomers either, it's just the older generation in general taking advantage of the economic conditions of their time. Even my parents in law, who have worked middle class jobs their whole lives, own three properties here and 5 overseas (Ireland).
When we were house hunting, whenever we saw a young 20s/30s couple being outbid, it was by an Aussie boomer. Just my experience though. The young couple agonising over every 10K increment while the boomer going up by 20K at a time without hesitation. It's a common sight.
We are talking about people using foreign money to buy housing. I am assuming you bought your home with money earned from working in Australia ? If you used money from family overseas then yeah I'd call that foreign investment.
> the vast majority of foreigners in Australia are students or people on a temporary working visas. These people aren't usually buying houses,
But they do push up rental demand which pushes up rental prices which makes property investing more attractive for investors
This trope of _foreigners raising housing costs_ has always been a myth perpetuated by the wealthy elite so that we get off their backs about owning multiple investment properties.
The average politician owns something like 5 properties including their land tax exempt PPOR. Easier to blame some Chinese migrant off a premium class flight looking to park some cash than their class. Also all those 20 year olds with 40 properties gracing Domain's "young gun" section; gotta keep an eye out on those
> The average politician owns something like 5 properties
and how many politicians are there for this to have made any difference?
The overwhelming majority of property buyers are just wealthy australians (politicians included). The "blame", if you can call it that, is that aus citizens are too wealthy.
And here’s me thinking it was just foreigners buying homes here in a time of crisis and, well, pushing up prices because they are buying homes here.
Supply and demand.
Bonus: the properties are often left vacant.
There's a supply side to that equation as well. Without the prospect of foreigners buying homes, the business case for new apartment buildings doesn't stack up.
With notable exceptions:
https://www.abc.net.au/news/2023-09-27/jewel-development-surfers-paradise-apartments-housing-crisis/102412680?utm_source=abc_news_app&utm_medium=content_shared&utm_campaign=abc_news_app&utm_content=link
Certain minority groups will always be seen as foreigners. Certain minority groups have a disproportionate presence in real estate investing.
A lot is brought up about the use of proxies but it isn't backed by remittance data (Australia being a net sender of remittances).
> it isn't backed by remittance data (Australia being a net sender of remittances).
remittance data doesn't give you evidence of much, because it is possible that there's a lot of remittances from aus to overseas, at the same time as there's investment capital flowing in. Just because the net is overseas, doesn't mean there's very little flowing in, because money is fungible, the net amount tells you very little.
The actual figures are obscured. Lots of proxy buyer services available, most of them operating on social media in other languages. These "stats" are pointless.
You find a proxy buyer and enter into an agreement with them. The social media helps foster the link.
Surely you understood this, though. What did you _really_ want to say?
Then what happens, you transfer 1.5 million dollars to someone you met on Facebook and they buy the house and you don't actually own it?
And yeah what I really want to say is you are full of sh*t.
Yes, it's exactly as ridiculous and outlandish as you're trying to make it sound. You find a random person and give them the money. Durrrrr. You got me good there hey.
Orrr... there are businesses set up in China that foster links between buyers and onshore Australian citizens, that guarantee security of funds and trustworthy clientele, and that openly advertise their services on WeChat, through migration agents etc.
On the other hand, some random person on Reddit _did_ just decide that's bullshit. I should discount my personal experience otherwise, as well as the kazillion results if you google "is this a thing?" now.
Actually he is probably not wrong. This happens even with property in China. If the person has acquired foreign citizenship, then in order to sell their property in China they need to find a trustworthy person who is a citizen transfer the property to and do the transaction and a public notary to witness it. Same but different concept, so they are probably used to these kinds of restrictions.
And what is even racist about it? What's your problem!
Depends how you define “foreigner.”
Fun fact - wealthy people rarely buy investments in their own name. Asset protection is incredibly important after a certain point and particularly if you want to sit on any company boards.
Breaking it down a bit:
- home ownership rate is ~60% (heavily weighted to older demographics)
- 8% of residential property is owned by companies
- where’s the other ~30%? A small percentage would be government owned. The rest? There’s not much public data on this, but by inference we can say it’s in the only remaining legal entity - trusts.
Family trusts, super funds (including self managed), and other types of discretionary trusts.
Technically FIRB has rules that should capture foreign controlled companies and trusts in their review process, but how well enforced is it?
Not even accounting for people who would not be classified as “foreigners,” because they are Australian residents (migrants).
tl:dr; I very much doubt the definition of “foreigner” would pass the pub test.
Just want to add that the 60% is only owner occupied, so doesn't include people owning investment properties, so that remaining 30% wouldn't all be in trusts
I have a few friends who are citizens or PR who immigrated but were only able to buy because they were gifted money to help with the down payment from their parents (not terribly different from many born and raised Aussies buying). Somehow my friends from the UK don’t get the same scrutiny for it as my friends from China.
It’s probably something to do with having the king on back of our coins, and the flag in our flag, and the same language, and being a commonwealth, legal system, political system, tv music and media. I dunno. They blend right in.
It’s a fair point though.
Do your friends from China scrutinise the same way?
Ok, trade UK for Germany or Brazil or whatever so the language/commonwealth/government is less of a factor.
I think people who get PR/citizenship in Australia generally want to be part of Australian society. To get PR it’s a requirement to be fluent in English. Most people are educated professionals many of which have been educated here or other Anglo nations. Even if you grew up in China, you probably watch the same stupid Marvel movies and share some cultural touchstones. Sure there are cultural differences but does that make them less Aussie? Australia is in the Asia-Pacific region and our food and culture is very influenced by Asia as well as the UK and the U.S.
This comment generally seems kinda racist.
Hey hey, I’m just saying why people in general scrutinise things that way. It’s just the way the world is.
China is not a long time ally or anything. It is known to have agents active in Australia trying to kidnap Australian citizens that have spoken out against the Chinese government.
There is a definite cultural difference, and thus more scrutiny.
None of this has anything to do with race.
I think of you are a citizen whatever. Buy what you like. 👍
Also want to add that a lot of foreigners buying established properties are in a relationship with a citizen. For example, I know that a lot of chinese couples will have 1 person who is functionally Australian but won't give up their Chiense citizenship because it make travel beteeen the 2 countries easier.
Dutton was slammed during budget season when he claimed he would slash foreign investment except he couldn’t really tell how many a year we are getting. This is because the number is so low, it hardly puts a dent into the actual problem.
A lot of foreign investment is also at the higher end so debatable whether it affects FHBs much
It does because of the flow on effect down the chain where top end houses become too expensive so that pushes buyers to lower tier houses who can bid higher, combined with the low number of new builds. Another way of seeing this effect is the outflow of people from Sydney which is very expensive to other cities buying at a premium above normal in the new market pushing them up because their expectations are so different to the markets they move into.
Yes and its substantial !
The reason for the confusing stats is the majority of foreign money coming into Australian housing does so by having a child or family member come here and get permanent residency and then they buy a house using their family money.
People with an agenda will claim stupid shit like "tHe pErcenTage oF housing bought by foreign money is only low ....". Which is true, but they are playing dumb !
Is anyone really going to believe a 25 year old immigrant who's been working here for 2 years and got PR yesterday buys a 2 million dollar home with cash is not foreign investment ? Because thats what these stats do . There are also other ways to obscure where the money in property purchases has come from and Australian regulation are some of loosest in the world in regards to asking any questions.
Until the Australian Government pull their finger out and implement AML for property purchases, these substantial backdoor dirty foreign money purchases will continue at the detriment to the average Australian.
Depends what you define foreigners as. Read the definitions on page 1 of the report. Also new builds (not sure if it's apartments only?) aren't required to register. Neither are residents. It's well known that there's all kinds of back doors and loopholes where people use relative residents as proxies. Even at it's peak (I'm having trouble finding references), before the FIB, foreign buyers only made up 10% or so of buyers. It's probably similar today. Foreign buyers are a pretty convenient scapegoat everywhere property prices are rampant and if foreign purchases are banned it's just immigrants instead. The truth is, if you want to be angry at someone, it's probably the local population doing the overwhelming majority of the damage
>…10%, so it’s probably similar today. 10% is a huge percentage.
Right! That comment is trying hard to downplay it, but 10% of sales being to foreign buyers is a massive amount. And as they pointed out, there are all kinds of loopholes, backdoors, proxies and purchases that doesn't have to be registered. So the actual amount of foreign buyers is probably quite a bit higher than what's reported.
If you think about it, if 10% of sales make it to the signature, how many aren’t? Most people don’t get the first property they go for.
What have failed sales got to do with anything? But it isn't even 10% : the number was made-up - "*I'm having trouble finding references*"
Not so much failed sales but the additional competing market, as only 1 ever makes the sale, if 10% was the figure of contracts signed, it’s not accounting for how many might *more* be adding pressure to the market. You could have 4 foreign buyers vying for a sale but only one makes it through.
Phew, I’m not going crazy. 10% (or more) has a massive effect on prices. In any market. It’s not linear.
It isn't 10% (or more): the number was made-up - "*I'm having trouble finding references*"
I think you'll find the real percentage is actually more than this... Significantly more.
I actually think it is significantly less: https://foreigninvestment.gov.au/sites/foreigninvestment.gov.au/files/2023-10/res-insights-report-2021-22_0.pdf
"a foreign person through **self-registration**"
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Exactly it's based on them registering foreign ownership with external banks. That is how I read it. If they pay cash and don't register they aren't counted. It's in the fine print too, and you would think the correct methodology is one of deductive logic not inductive.
Especially if it's year after year..... If you have for example 1000000 houses in the market with 100,000 being sold every year then if 10,000 are being sold to foreign buyers every year then year after year the amount of property siphoned away from the local population is huge... Of course some foreigners would be selling/moving so it's not that clearcut but still...
It isn't 10,000: the number was made-up - "*I'm having trouble finding references*"
I was making an example - and not a good one at that... Over 10 years the housing stock would increase and some foreign buyers would stay so they become locals but still the point was that it's a cumulative affect of external money being pumped into a system and must have some impact.
"*external money being pumped into a system and must have some impact.*" At the numbers of properties recorded by FIRB, the "external money" would not be having a noticeable impact.
Lol are you for real... The FIRB doesn't have a clue what's going on... Nor do they have the resources to police this.... With the various loopholes etc... https://www.abc.net.au/news/2014-05-30/firb-lacks-resources-to-enforce-foreign-property-buyer-restrict/5489554
I want to know what effect on inflation this has. That driving up of house prices and subsequent selloff must be 'producing' a shit ton of aussie dollars that didn't exist before. It would all be hidden in the fractional reserve banking, so very hard to see but once those dollars are created, they're not destroyed easily without a big correction, which hasn't happened ..yet?
No effect on inflation: sales of existing houses are not in the CPI
haha, exactly. Classic CPI defining inflation is quite possibly the achilles heel of the whole economy. Where are we keeping track of the endogenous money?
> 10% is a huge percentage. it's also pulled out of his ass, too late though, everyone's already taking this random redditor as the source of truth.
Pretty soon it will show up on Google (as an “AI” “answer”) and it becomes gospel.
I did mention it was an off the top of my head number. Very different to from the ass. The real number is not going to be that far off but you're free to go and find out the real number instead of wasting everyone's time whinging about it
> I did mention it was an off the top of my head number. Very different to from the ass. it's exactly that. > you're free to go and find out the real number instead of wasting everyone's time that's literally you with your made up numbers.
the real problem then comes, is that 10% sitting empty as a land bank
> Three years after construction finished on the most expensive high rise development in Queensland's history, hundreds of its luxury beachfront apartments remain empty — and most of them are not for sale. https://www.abc.net.au/news/2023-09-27/jewel-development-surfers-paradise-apartments-housing-crisis/102412680
yep, look at those big apartment blocks at night and see how many have no lights on... now i get people are out, sleeping, watching pornhub with the lights off.... still that's a lot of places with no lights on
It is crazy to think the developers make more money by not selling.
This is what happens when you have a decade of cheap money. It's why you see clowns like Harry Triguboff screaming for rate cuts again.
The government needs to start taxing them for keeping them empty
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Yes. That is correct. This single apartment building is causing the housing crisis. And overseas too. And is almost single handedly responsible for global warming. Mate, It’s just an amazing example of land banking, where building an entire, luxury apartment block, at great cost, finds the developer making more money by *not* selling it. Things are that crazy.
It isn't even 10%: the number was made-up - "*I'm having trouble finding references*"
I think that number is based on this NAB [survey](https://business.nab.com.au/nab-quarterly-australian-residential-property-survey-q4-2023/). It shows about 10% of new properties being bought by foreigners and about 5% for established properties. I can’t find any information on its methodology or definitions though, so I’m sceptical of taking it on face value. Page 12 of the PDF report only says: > Around 300 property professionals participated in the Q4 2023 survey So it’s just as likely to be numbers based on 300 real estate agents.
I think we can all agree that nobody knows, which is not great.
I'm inclined to trust the FIRB more, seeing as they are the one doing the actual approvals. Until someone can show me another set of verified data, I'm not sure why we shouldn't be using the government's data. The only caveat in my view is that the latest FIRB report is based on FY22, which is almost two years old, and it was during a time when some covid restrictions were still in place.
Look at the history of the report - the numbers are fairly steady
I think it's less now. When I last looked at the data it was much lower than 10% and falling from that high.
Which is completely made up - "*I'm having trouble finding references*"
I found this: https://foreigninvestment.gov.au/sites/foreigninvestment.gov.au/files/2023-10/res-insights-report-2021-22_0.pdf Looking at the 2021-2022 purchases of new dwellings, minus the sales of new dwellings, there were about 1,200 new dwellings reduced from supply of new dwellings by foreign owners purchasing them. So… 1,200/?? It’s going to be a very small percentage. I suspect that, anecdotally, people think anyone with an accent is a non-resident.
I wasn’t aware of back doors, does this require complete faith in your proxy? And either way how can the first two links I found get the numbers they have if it’s all meant to be untraceable? Wait do you mean permanent residents who were born elsewhere aren’t required to register either? Well of course not! They live here. If I told my dad he couldn’t buy a house here he’d have gone back home to his sheep. I’ll give you a clue, he’s not Irish.
Proxies are usually children but also other family members. I doubt that someone's going to get a random person to do it. Any resident, temporary or permanent can buy property without going through the FIRB so all in all that's a lot of exceptions. Including sheep lovers. It's not that hard to get if you've got the money so the numbers you gave are really the exception in terms of "foreign" investors
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> if you are a foreigner buying existing residential property, chances are the application fee and foreigner surcharges will wipe out any potential gain. Not if the whole purpose is to get your money out of your country and into Australia > Family members also get caught in the FIRB definitions even if you think you are being sneaky by forming loads of trusts Not if you give your relative your money and he buys it in his name with no record the money came from you
I didn’t mean a random person, that’s just crazy. I meant a loved one. People screw over their siblings and parents all the time, especially when their parents are rich enough to spoil them. That’s not true, about temporary residents I mean. They are almost always allowed to buy a house to live in but they always have to apply.
> always have to apply More complex than that. Sometimes they do, sometimes they don't. Exactly why I'm trying to impress the point that a lot gets through the cracks. Pretty sure if you delve into the application data it's not people buying a house to live in, it's people buying farms or subdividing blocks etc.
As someone currently going through the process, married with my australian partner and currently awaiting PR approval, FIRB isn't required for us to buy our PPOR (NSW). The extra 4% surcharge does put a lovely dent in our budget though...
Your proxy doesnt need to be thr owner - a sensible person would use a company and trust structure - the ultimate owner is hidden
…and if a foreign person is a beneficiary of that trust, the trustee needs FIRB approval. This isn’t way to get around the law. I realise your point is that you can hide ownership this way, but to do so the trustee would need to sign a series of false declarations when acquiring the property.
Where I live it’s more interstate buyers. Paying above asking without even seeing the property and a week later it’s up for rent @ $650/week
local population and interest rates held too low for too long
>Even at it's peak (I'm having trouble finding references), before the FIB, foreign buyers only made up 10% or so of buyers. It's probably similar today. That hides a lot of nuance though, firstly because there is estimated to be a hell of a lot of foreign money that gets funnelled through local intermediaries due to our exceptionally lax laws controlling money laundering through real estate. Secondly because the property market is heavily segmented and foreign money is not equally distributed across those segments. If you are trying to buy a certain type of property in a certain geographic area then foreign money can be huge factor. It is the same with all the other factors (lack of housing stock, limits on development, immigration, investors, vacancy rates, geographic dispersal of employment) - they all affect certain segments of the market far more than others. It's what makes solving the housing crisis so difficult - there is no one-size-fits-all solution.
It's not the "local population" causing the problem. Well unless you count the fact that we keep voting for the same major parties..... The problem is government restriction of supply going on for decades. Local , State , Federal all have failed to just let the market build housing.
Putting my hand up because I immigrated at 9, became a citizen at 15 and now own a house....so I guess I fit the bill haha. In all seriousness though, the vast majority of foreigners in Australia are students or people on a temporary working visas. These people aren't usually buying houses, nor is it that easy if you're on such a visa. Mainly, the housing market is being driven up by growing demand for rentals, buyers with the bank of mum and dad, and a large cohort of boomers owning several investment properties. It's not just the rich boomers either, it's just the older generation in general taking advantage of the economic conditions of their time. Even my parents in law, who have worked middle class jobs their whole lives, own three properties here and 5 overseas (Ireland). When we were house hunting, whenever we saw a young 20s/30s couple being outbid, it was by an Aussie boomer. Just my experience though. The young couple agonising over every 10K increment while the boomer going up by 20K at a time without hesitation. It's a common sight.
We are talking about people using foreign money to buy housing. I am assuming you bought your home with money earned from working in Australia ? If you used money from family overseas then yeah I'd call that foreign investment.
> the vast majority of foreigners in Australia are students or people on a temporary working visas. These people aren't usually buying houses, But they do push up rental demand which pushes up rental prices which makes property investing more attractive for investors
Macrobusiness is not trustworthy. Bunch of bogans acting like financial gurus
This trope of _foreigners raising housing costs_ has always been a myth perpetuated by the wealthy elite so that we get off their backs about owning multiple investment properties.
The average politician owns something like 5 properties including their land tax exempt PPOR. Easier to blame some Chinese migrant off a premium class flight looking to park some cash than their class. Also all those 20 year olds with 40 properties gracing Domain's "young gun" section; gotta keep an eye out on those
> The average politician owns something like 5 properties and how many politicians are there for this to have made any difference? The overwhelming majority of property buyers are just wealthy australians (politicians included). The "blame", if you can call it that, is that aus citizens are too wealthy.
And here’s me thinking it was just foreigners buying homes here in a time of crisis and, well, pushing up prices because they are buying homes here. Supply and demand. Bonus: the properties are often left vacant.
There's a supply side to that equation as well. Without the prospect of foreigners buying homes, the business case for new apartment buildings doesn't stack up.
With notable exceptions: https://www.abc.net.au/news/2023-09-27/jewel-development-surfers-paradise-apartments-housing-crisis/102412680?utm_source=abc_news_app&utm_medium=content_shared&utm_campaign=abc_news_app&utm_content=link
Certain minority groups will always be seen as foreigners. Certain minority groups have a disproportionate presence in real estate investing. A lot is brought up about the use of proxies but it isn't backed by remittance data (Australia being a net sender of remittances).
> it isn't backed by remittance data (Australia being a net sender of remittances). remittance data doesn't give you evidence of much, because it is possible that there's a lot of remittances from aus to overseas, at the same time as there's investment capital flowing in. Just because the net is overseas, doesn't mean there's very little flowing in, because money is fungible, the net amount tells you very little.
The actual figures are obscured. Lots of proxy buyer services available, most of them operating on social media in other languages. These "stats" are pointless.
>proxy buyer services available, most of them operating on social media in other languages What? How do you proxy buy a house via social media?
You find a proxy buyer and enter into an agreement with them. The social media helps foster the link. Surely you understood this, though. What did you _really_ want to say?
Then what happens, you transfer 1.5 million dollars to someone you met on Facebook and they buy the house and you don't actually own it? And yeah what I really want to say is you are full of sh*t.
Yes, it's exactly as ridiculous and outlandish as you're trying to make it sound. You find a random person and give them the money. Durrrrr. You got me good there hey. Orrr... there are businesses set up in China that foster links between buyers and onshore Australian citizens, that guarantee security of funds and trustworthy clientele, and that openly advertise their services on WeChat, through migration agents etc. On the other hand, some random person on Reddit _did_ just decide that's bullshit. I should discount my personal experience otherwise, as well as the kazillion results if you google "is this a thing?" now.
>On the other hand, some random person on Reddit Like you, with zero links or evidence to back up your weird racist fantasy.
Actually he is probably not wrong. This happens even with property in China. If the person has acquired foreign citizenship, then in order to sell their property in China they need to find a trustworthy person who is a citizen transfer the property to and do the transaction and a public notary to witness it. Same but different concept, so they are probably used to these kinds of restrictions. And what is even racist about it? What's your problem!
lol it's Reddit. He realised I'm likely _not_ talking out my arse so... "whatever, racist" was about the best he could muster up.
No you are talking out your arse. The reason you are doing this is racism. Or would you like to offer another motive for your lies?
I don't think they care either way lol. What is the motive for you having a massive sook? 😂
That wasn't racism at all 🙄
Depends how you define “foreigner.” Fun fact - wealthy people rarely buy investments in their own name. Asset protection is incredibly important after a certain point and particularly if you want to sit on any company boards. Breaking it down a bit: - home ownership rate is ~60% (heavily weighted to older demographics) - 8% of residential property is owned by companies - where’s the other ~30%? A small percentage would be government owned. The rest? There’s not much public data on this, but by inference we can say it’s in the only remaining legal entity - trusts. Family trusts, super funds (including self managed), and other types of discretionary trusts. Technically FIRB has rules that should capture foreign controlled companies and trusts in their review process, but how well enforced is it? Not even accounting for people who would not be classified as “foreigners,” because they are Australian residents (migrants). tl:dr; I very much doubt the definition of “foreigner” would pass the pub test.
Just want to add that the 60% is only owner occupied, so doesn't include people owning investment properties, so that remaining 30% wouldn't all be in trusts
Ah - you are correct - so my math is flawed. Still, a shame there is not good data on this, presumably to protect people’s “privacy” 🤔
I have a few friends who are citizens or PR who immigrated but were only able to buy because they were gifted money to help with the down payment from their parents (not terribly different from many born and raised Aussies buying). Somehow my friends from the UK don’t get the same scrutiny for it as my friends from China.
It’s probably something to do with having the king on back of our coins, and the flag in our flag, and the same language, and being a commonwealth, legal system, political system, tv music and media. I dunno. They blend right in. It’s a fair point though. Do your friends from China scrutinise the same way?
Ok, trade UK for Germany or Brazil or whatever so the language/commonwealth/government is less of a factor. I think people who get PR/citizenship in Australia generally want to be part of Australian society. To get PR it’s a requirement to be fluent in English. Most people are educated professionals many of which have been educated here or other Anglo nations. Even if you grew up in China, you probably watch the same stupid Marvel movies and share some cultural touchstones. Sure there are cultural differences but does that make them less Aussie? Australia is in the Asia-Pacific region and our food and culture is very influenced by Asia as well as the UK and the U.S. This comment generally seems kinda racist.
Hey hey, I’m just saying why people in general scrutinise things that way. It’s just the way the world is. China is not a long time ally or anything. It is known to have agents active in Australia trying to kidnap Australian citizens that have spoken out against the Chinese government. There is a definite cultural difference, and thus more scrutiny. None of this has anything to do with race. I think of you are a citizen whatever. Buy what you like. 👍
Love me some nationalistic and economically uninformed pearl clutching
Also want to add that a lot of foreigners buying established properties are in a relationship with a citizen. For example, I know that a lot of chinese couples will have 1 person who is functionally Australian but won't give up their Chiense citizenship because it make travel beteeen the 2 countries easier.
Dutton was slammed during budget season when he claimed he would slash foreign investment except he couldn’t really tell how many a year we are getting. This is because the number is so low, it hardly puts a dent into the actual problem. A lot of foreign investment is also at the higher end so debatable whether it affects FHBs much
It does because of the flow on effect down the chain where top end houses become too expensive so that pushes buyers to lower tier houses who can bid higher, combined with the low number of new builds. Another way of seeing this effect is the outflow of people from Sydney which is very expensive to other cities buying at a premium above normal in the new market pushing them up because their expectations are so different to the markets they move into.
Carpenter and Investor here Fun Fact: Most rentals in Australia about 3 in 5 are owned by Foreign companies not foreign individuals.
It would be nice to see a source for this claim.
their source is they did some carpenting at 5 different houses this week and 3 of them had "foreigners" in them.
You sound like one of my tennants
Yes and its substantial ! The reason for the confusing stats is the majority of foreign money coming into Australian housing does so by having a child or family member come here and get permanent residency and then they buy a house using their family money. People with an agenda will claim stupid shit like "tHe pErcenTage oF housing bought by foreign money is only low ....". Which is true, but they are playing dumb ! Is anyone really going to believe a 25 year old immigrant who's been working here for 2 years and got PR yesterday buys a 2 million dollar home with cash is not foreign investment ? Because thats what these stats do . There are also other ways to obscure where the money in property purchases has come from and Australian regulation are some of loosest in the world in regards to asking any questions.
Until the Australian Government pull their finger out and implement AML for property purchases, these substantial backdoor dirty foreign money purchases will continue at the detriment to the average Australian.