Will foreign property buyers from China, Asia shun Australian market over latest fees surge?
The Australian government passed the new rules on Wednesday to preserve the housing supply for local buyers and tenants.
Treasurer Jim Chalmers and Housing Minister Julie Collins said the higher fees were essential to ensure foreign investment in residential property was in Australia’s national interest.
Australia’s housing market is one of the most inaccessible in the world due to high prices and shortage, especially in bigger cities such as Sydney.
Despite rising interest rates, the tight supply of homes – partly driven by reduced construction – has continued to push up house prices in major Australian cities, while the number of rental homes fell to a new low in December at 20 per cent lower than the 10-year average.
The surge in foreign buyers in these markets added heat to the markets starting around 2014, and both the Australian federal and state governments have for almost a decade been introducing increased surcharges in stamp duties, investment and vacancy fees, as well as land taxes in a bid to cool the market.
The result was an obvious withdrawal of foreign buyers, particularly those from China, who had dominated the sector.
This round of fees would be no different, Walton Chu, founder of Sydney real estate agency Home789, said.
“This will scare them [foreign buyers] all off,” he said.
There will always be some Chinese foreign interest in Australian property, but that appetite now is 20 per cent of its peak about seven to eight years ago, according to Chu.
Instead, many foreign buyers have been flocking to other markets with lower buying thresholds and fees, such as Dubai, he pointed out.
Another agent, The Agency’s Steven Chen who also deals with luxury buyers, said the higher fees were substantial and would factor