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A Different Kind of Real Estate Crisis in Australia


11 May 2010 - www.holprop.com

The big story in most countries around the world is how they’re beginning to see daylight at the end of the tunnel in their real estate markets. Following the U.S. down a road of deflated prices and tough credit situations, most world markets are just now beginning to see improvement. Builders are forecasting new business, and existing homes are selling faster and at stable or better prices…mostly. But, it’s a tentative situation, and bears close monitoring to stimulate improvement and avoid a “double-dip” in prices.
But, then there is Australia. In years past, Australia had relaxed foreign real estate purchase rules. But, they were reimposed in 2008. While there hasn’t necessarily been aggressive enforcement of these rules, the trend is now toward strict interpretations and fast actions. The influx of foreign money, much of it Asian, into the Australian real estate markets is generating complaints from ordinary Australians that they’re being priced out of their own housing markets.

In Australia’s major cities, prices have been climbing steadily, especially in Sydney, Melbourne and Perth. The country’s mineral exports bonanza is one contributor to this rapid growth. With the purchase of a $23 million property in November 2009 at auction, the Victoria state market accelerated, breaking through a weekly billion dollar sales barrier in March 2010. In an international survey at the beginning of 2010, Australia’s housing was the least affordable of six other nations, United States, Britain, Canada, New Zealand and Ireland. Foreigners are said to be bidding up prices in every area. One influence is the number of Asian children studying in the country, and their parent’s purchases of housing for them. Some analysts blame a lack of housing supply and government grants to first time buyers are partially to blame. Prime Minister Kevin Rudd had this to say: "We want to make sure that Australian working families are not being priced out of their own family homes. That is why we have acted in the way in which we have done. We want to make sure that foreign speculators are not going to force up prices for Australians seeking to buy their own home, buy their first home and we think this is the right course of action." Violation of the rules is resulting in stiff penalties, including mandatory sell orders. Real estate agents are also being carefully monitored, with penalties to those found to be helping foreign investors to evade the rules.


By Tony Osust www.holprop.com - Property News

 

 

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