There are plenty of things being done and still more about the frustration Barry Li shares about homeownership in his book The New Chinese: How They Are Changing Australia.
Foreign homeownership has been an element at the heart of the debate over Australian housing market price increases. The Chinese are regularly blamed for the price hike, purportedly pushing new owners out of the competition, and rising rental prices for lack of availability.
Local Chinese families aren’t immune either, unable to compete with Chinese buyers who are helped by “their entire family, who [have] a lifetime of savings in their pocket boosted by the economic boom”. Li says “I should probably blame the government for poor urban development planning and letting unregulated foreign money in and not doing enough to address affordability issues for the locals. However, because I know the Chinese so well and I am Chinese myself, I have the liberty to blame the cash-loaded Chinese buyers”.
The Australian Financial Review reported that one in ten homes in NSW is purchased by foreign investors; even when dual citizenship and joint Australian/foreign buyers are removed from this statistic, the figure (including permanent residents) it is still 8% of homes. Some disagreement occurs as to whether Chinese/foreign investment is really the cause of trouble for first home buyers, centring on the argument that ‘rich Chinese’ are not looking for the same type of housing as first home buyers. In those type of reports, domestic investors often are told to thank foreign ones for funding development through pre-sales.
Part of the May 2017 Budget included measures to balance the effect foreign investment has on local buyers. Part of this included a new law, already in use in Victoria, that taxed owners who left dwellings unoccupied for over 6 months – owners essentially using Australian homes as off-shore money holdings. China has also brought in new regulations over the last few years regarding money flowing out the country; from July 2017, yearly foreign currency holding will be limited to $50,000 US for individual investors and from September all transactions over $200 AU will be reported back to the central bank.
Many analysts report, with increased taxes in Australia and stricter regulations in China, that the rate of Chinese investors will slow over the coming years. Australian-Chinese families, those that are ‘poor Chinese’ according to Barry Li’s interpretation, find themselves caught between being blamed for housing unaffordability and being unable to easily afford themselves. Will Australian extra tax measures really be effective in controlling super-rich Chinese investors? Or will housing prices continue to rise, increasing the ranks of the Australian and the Chinese ‘poor’?
Photo taken at Erskineville train station, Sydney, May 2017. Not a photographer – just going through the photos that I have and finding a new purpose for them.