In Australia if I recall correctly, foreign buyers are only able to buy newly built homes. Canada would benefit from a similar rule, it would stimulate more housing and not impact the demand for existing homes.
The apartment I lived in before had a few hundred sold, with most sitting empty. The building managers mentioned most of the owners were Chinese, and would rather not rent it out than drop the rent prices, so they had to constantly carry out inspections on apartments that had never been lived in, for a few years now.
Absolutely depressing. The bit that weirded me out most was the post boxes. They were quite big, but about half of them were overflowing, which had to have been the result of a few years of accumulation at least.
If the buying price was 40-50% lower, I could save up for a deposit in a year or two, but the crazy house prices here in Australia are not getting any better at all. It also feels morally wrong to be investing at the cost of someone being able to afford a roof over their heads, so maybe renting it is for me.
Of course, the city also is going to be hosting the Olympics in a while, so that solidifies my moving away plans!
Buying a house and leaving it empty is incredibly common in China and other Asian countries. You’ll see entire developments with nobody living there and most of the units unfinished inside.
The reason I was told was:1) with crappy equity markets property is a safer investment, 2) not many questions about where the money comes from, 3) very low or non-existent property taxes (costs nothing to hold) and 4) as these countries get wealthier demand for housing only goes up.
For wealthy individuals they can basically buy their residency by operating/investing in an Australian business. After that they apply for a Permanent Residency visa.
Once they are a resident they can purchase whatever property they wish just like an Australian Citizen.
Yes but that's tangential, this person outright bought an existing property as a foreigner knowing full well he's not allowed to. Not a single agent, conveyancer or bureaucrat in the entire process ever tried to stop it from happening. The millions of people who looked at it on the front page of paper didn't think twice.
You can buy citizenship or residency anywhere and get the perks, but that has nothing to do with the point I was making here. The point is that laws are useless until they are enforced.
I agree. I was just adding that even though the laws made to appease the public were created there are still loopholes that invalidate the claim that “only new properties can be sold to foreign citizens.” It’s untrue and even if it was it still ignores the fact that the property market doesn’t distinguish old from new.
Isn't the problem in Australia (and New Zealand) mainly caused by first home buyers? They seem to pay the maximum the bank will lend them with no regard for being profitable or a good investment. Just get the best house possible at any cost. Once they own them, they fill them with lower occupancy than investors do, so the supply of housing effectively decreases. I'm one of those people. My house used to be a rental with 5 people in it. Now we have only 3. My neighbor owner has 1 person in a 3 bedroom house.
The problem is caused by a whole number of factors that incentivise people to buy houses they won’t live in.
Housing in Sydney is becoming a self fulfilling prophecy. The more people spend on it the more it’s value increases hence attracting more investors who drive prices up.
In order for this to stop the majority of the public will need to find this whole situation unacceptable.
I find it absurd that citizens from countries that disallow Australians to buy property can buy residential property here in Sydney. Apparently helping foreign citizens to avoid taxation/capital controls while propping up the construction/banking sector is more important than looking after the average citizens best interests.
And factors that incentivize people to buy houses with rooms they won't live in! I.e. owner-occupiers. I'm trying to say that these people are a major cause of high prices but they're the "us" and the "goodies" and even the "victims" so it's not popular to blame them. Instead, the popular opinion is to blame some outgroup like foreigners, nebulous "rich" people, "evil" investors, etc.
One way for it to stop is for owner-occupiers to stop fetishizing a single family home on a 1/4 acre section and tolerate living in a high density apartment like most people in big cities everywhere else in the world.
They are contributing to the problem no doubt but I doubt they are the major reason. The prices of apartments are also rising. I rented a studio for 10 years in Sydney and the price doubled in that time. I would have purchased it or one similar if not for the lending restrictions that properties had to be over a specific size. So instead of owning my own place I paid off half of the owners investment property while they delayed and refused repairs at every opportunity.
I am not demonising these people. I am just merely saying that the Australian government, the banking industry and Australian society at large believe that it’s more important that a citizen/non-citizen can lease a residential property than it is for an average citizen and wage earner to be able to purchase a property to live in.
I find it funny that at the beginning of the pandemic when people were buying up all the available toilet paper to sell at a markup they were “selfish” but somehow doing the same with shelter is not.
The prices are not being driven up by buyers with 5% down payments. They are being driven up by 100% cash buyers, people moving cash across national boundaries. Just look at the percentage of "all-cash" offers. That tells the whole story.
Considering that foreigners have to buy new build, how do you reconcile that with your view? What evidence would cause you to think it is not foreigners?
> They seem to pay the maximum the bank will lend them with no regard for being profitable or a good investment. Just get the best house possible at any cost.
Where is the direction of causality? I don’t know any first time home buyer that wants to be paying the maximum they can afford given bank lending standards. They are doing so because otherwise they cannot buy a house.
No. They can always buy a house in some small rural town. They chose to buy in more expensive places up to what they can borrow. Some people will buy a house a 1 hour commute from their work because that's all they can afford while others will be only 30 minutes away. I wanted to live closer to the nearby city but couldn't afford it so I ended up in a more distant poor suburb.
In Indonesia, only citizens or businesses with part ownership by citizens are allowed to own property, and I think this is probably the right way to go for most other countries as well.
Unlike the vast majority of other human endeavors, land actually is a zero sum game, at least until we are a space-faring species.
Even if we become a space faring species, land will still be a zero sum game.
* Within the Solar System the amount of land available on bodies with not-crushing-gravity is limited to a few times the Earth surface. This includes hospitable bodies like Venus, Titan or the Moon. The entire area of Mars is slightly smaller than Earth's land area, with climate conditions significantly worse than Antarctica. Sobering map: https://brilliantmaps.com/solar-system-surface
* Inter-stellar travel is subject to prohibitive time and energy costs. Physically speaking there is no way for Alpha Centaurians to visit their Earth properties on a regular basis, or vice-versa. This renders the whole concept of 'property owned by foreign stellar body inhabitants' moot.
Land will stop being a zero sum game if we can ever figure out how to create pocket spaces. But then again, speculation has hit even virtual real estate before, so what do I know?
> Unlike the vast majority of other human endeavors, land actually is a zero sum game, at least until we are a space-faring species.
Around 17% of the Netherlands is reclaimed from the sea or lakes. The largest project (the Flevopolder [1]) was 240,000 acres, reclaimed in the 1950s and 1960s. Most of the land is still just meadows/grasslands (it has 2 towns with less than 350k inhabitants in total).
Meanwhile, in Amsterdam (less than 30min away by car or train) house prices keep increasing by 10%+ YoY. It seems that lack of physical land is not the main limiting factor.
That sounds like a recipe for teardowns, which are already a huge problem in vancouver. Incentivizing turning an old lower value house into a new high value house isn’t going to help people.
