Letter to the editor
Treasurer Jim Chalmers, in his budget speech, declared: “And we are facilitating pressure on the real estate market by prohibiting foreign investors from buying established homes and also taking energetic measures against foreign land banking.”
Foreign investors have been prohibited from buying houses established since 1975.
Anyway, politicians continue to blame investors, foreigners and foreign investors for housing scarcity in Australia. But the cause of scarcity is government policies such as that announced in the budget last night.
The Foreign Procurement and Procurement Law of 1975 prohibits foreign investors from buying housing established in Australia [including Alice Springs] without the prior written consent of the Australian treasurer.
One in 10 separate homes built in Australia is built by a property builder abroad. These global housing builders provide Australia with an investment in cutting -edge technologies and construction products.
Penalize these businesses and make it difficult to build new houses in Australia can only lead to less new houses.
These global builders are responsible for building thousands of “specifications houses” every year where they buy land of Greenfields and build a house that is then sold.
Prohibit buying land adds more complexity and costs to deliver a new home to the market.
The underlying cause of housing scarcity is too much government participation in the market, and the solution to increase supply is less government bureaucracy.
If the problem that the treasurer seeks to address is that international students who buy established homes, policies must be aimed at this problem, not to penalize some of the world’s largest housing builders.
Since 2015, state and federal governments have imposed a range of punitive taxes on foreign investors. The consequence of this is that these investors have retired from the Australian market, and this is a key reason why the volume of apartments that construction begins is almost half of what it was in 2016.
Penalize property builders abroad for the construction of houses in Australia will make the goal of 1.2 million homes hinder.
Foreign investors build new homes, do not live in them and cannot take them out of the country.
Tim Reardon, Chief economist, Housing Industry Association
Image: Housing construction.
