Demand for Australia property to climb among foreigners… Australia in for housing 'bloodbath'… Higher property prices good for commercial sector?...
Foreign Residential Property Investment Will Roll On: BIS
Overseas investment in housing throughout Australia will not slow down due to new Federal and State government rules imposing greater cost on foreign property transactions, a key research firm says.
According to an article from Sourceable, BIS Shrapnel likened moves on the part of the Federal and Victorian governments to introduce application fees for foreign buyers and beef up regulation and penalties for breaches in the case of the former and impose extra charges on for land tax in the case of the latter to ‘throwing pennies in the path of a steamroller.'
The firm said foreign investment in Australian residential property would continue to increase irrespective of the measures.
“In the medium term the upwards trajectory of investment will continue as China’s affluent middle class continues to grow and Australia continues to be seen as a safe haven for investment,” BIS researcher Maree Kilroy said.
Australia in for housing 'bloodbath'
The Australian property market is in the midst of the largest housing bubble on record, two economists have warned the government. While many industry commentators have put rising house prices down to a shortage of supply to meet growing demand, including Mortgage Choice chief executive John Flavell, David and Soos argue that Australia’s housing shortage is fictitious.
“Contrary to the analyses of the vested interests, the data clearly establishes Australia is in the midst of the largest housing bubble on record,” the submission states.
“Policymakers are caught between a rock and a hard place, as implementing needed reforms will likely burst the bubble, causing severe financial and economic fallout as residential land prices revert to mean.”
Higher property prices good for commercial sector?
In the short term, higher property prices have a positive effect on these industries, but if the prices significantly drop in the long run, it could have a negative impact on construction activity and also potentially dampen retail sales, according to IBS World.
This is a result of the fact that rising property prices give developers an incentive to build new housing, driving demand for residential construction industries, according to an article on Mozo.
With the increasing demand for residential construction, employment in these industries also goes up. The catch however, lies in the difficulty that developers face in differentiating between price rise because of fundamental factors like limited supply, and those leading from speculation.
Overseas investment in housing throughout Australia will not slow down due to new Federal and State government rules imposing greater cost on foreign property transactions, a key research firm says.
According to an article from Sourceable, BIS Shrapnel likened moves on the part of the Federal and Victorian governments to introduce application fees for foreign buyers and beef up regulation and penalties for breaches in the case of the former and impose extra charges on for land tax in the case of the latter to ‘throwing pennies in the path of a steamroller.'
The firm said foreign investment in Australian residential property would continue to increase irrespective of the measures.
“In the medium term the upwards trajectory of investment will continue as China’s affluent middle class continues to grow and Australia continues to be seen as a safe haven for investment,” BIS researcher Maree Kilroy said.
Australia in for housing 'bloodbath'
The Australian property market is in the midst of the largest housing bubble on record, two economists have warned the government. While many industry commentators have put rising house prices down to a shortage of supply to meet growing demand, including Mortgage Choice chief executive John Flavell, David and Soos argue that Australia’s housing shortage is fictitious.
“Contrary to the analyses of the vested interests, the data clearly establishes Australia is in the midst of the largest housing bubble on record,” the submission states.
“Policymakers are caught between a rock and a hard place, as implementing needed reforms will likely burst the bubble, causing severe financial and economic fallout as residential land prices revert to mean.”
Higher property prices good for commercial sector?
In the short term, higher property prices have a positive effect on these industries, but if the prices significantly drop in the long run, it could have a negative impact on construction activity and also potentially dampen retail sales, according to IBS World.
This is a result of the fact that rising property prices give developers an incentive to build new housing, driving demand for residential construction industries, according to an article on Mozo.
With the increasing demand for residential construction, employment in these industries also goes up. The catch however, lies in the difficulty that developers face in differentiating between price rise because of fundamental factors like limited supply, and those leading from speculation.
