From the South China Morning Post, via Colin Brander:
Sydney is imposing new taxes on foreigners buying homes as concerns grow that a flood of mostly Chinese investors is crowding out locals and killing the “Great Australian
But as prices rise to record levels – Sydney is ranked only second to Hong Kong as major cities with the world’s least-affordable housing – new potential homeowners have been increasingly forced out of the market with foreigners blamed as a key factor.“The governments want to respond to a perception about housing affordability and the impact of foreign investment on that,” KPMG Australia’s indirect tax specialist Michelle Bennett said.
“(Politicians) are raising money from people who aren’t voting, so superficially you can understand that it’s possibly not bad politics,” she added, but warned the measures could be a “blunt instrument” that could hurt the market. …
“It is very bad. Without the Chinese nothing would ever get built,” the country’s richest man and head of prominent developer Meriton, “high-rise” Harry Triguboff told the Australian Financial Review last week.
“Never mind the bullshit stories, sales volumes have already dropped and prices are coming down steadily. The Chinese buyers are already disappearing.”
“(Politicians) are raising money from people who aren’t voting, so superficially you can understand that it’s possibly not bad politics,” she added, but warned the measures could be a “blunt instrument” that could hurt the market. …
“It is very bad. Without the Chinese nothing would ever get built,” the country’s richest man and head of prominent developer Meriton, “high-rise” Harry Triguboff told the Australian Financial Review last week.
“Never mind the bullshit stories, sales volumes have already dropped and prices are coming down steadily. The Chinese buyers are already disappearing.”
The article unfortunately does not distinguish between the reduction in Chinese buyers relative to domestic buyers. Its ‘evidence’ is also entirely anecdotal. It just notes that as prices have risen past some threshold, so the numbers of Chinese buyers has fallen. Whether this is the result of some new tax, or just prices being too outrageous in general, is not determined. Even the impacts of the much higher foreign-purchasing taxes in Singapore and Hong Kong are not identified. It’s just as likely that things are too expensive there – with or without an extra tax.
Until you can isolate: 1) the fact that a new tax – and a new tax alone – is the primary determinant in the reduction of foreign buyers in a hot housing market, and 2) those foreigners are the primary determinant in the high costs in that market, this endless drumbeat of ‘auslander raus’ is nothing more than adding 2 plus 2 and repeatedly getting 5.
From above: ** “It is very bad. Without the Chinese nothing would ever get built,” the country’s richest man and head of prominent developer Meriton, “high-rise” Harry Triguboff told the Australian Financial Review last week. **
Oh my, the richest man in the country might not be able to keep making untold billions putting up new buildings for foreigners. What a terrible shame. Maybe he could be shown a map on which there are more than 200 other countries from which rich people might appear to line his pockets with gold. Or maybe he’ll just have to make do with the billions he already has.
…. prices are coming down ….
To what, exactly? There is still no evidence a tax on speculation and foreign money will return prices to affordable levels.
Well there’s evidence in the article that restrictions are dampening the runaway demand from Chinese money. Simple economics teaches us when demand falls prices will follow.
“Dampening” demand from China does not address all the other factors these studies refer to.