- June 12, 2018
- Posted by: Rogers Property Group
- Categories: Australian Property Market, International Property Market, Latest News, Melbourne Property Market, Property Investment, Queensland Property News, Sydney Property Market
QLD Property Council has commissioned AEC Group to try and come up with some numbers that will support a reduction in the additional stamp duty for foreign investors from 3% to 7%. They are arguing that prior additional charge for foreigners has slowed down the property market.
I have to disagree with this. While I own a construction company and want to see more houses getting built, I believe that foreigners should be charged more to be able to invest here. Having excessive amounts of foreign investors does have short term benefits for people in construction and sales (like me) but I think your average citizen is penalised. Demand in a market should really come from population growth. If the market is solely grown from foreign investment, that is a false demand with many of these newly built residences actually lying vacant. Much of this money coming out of newly formed markets, such as China has been gathered in ways that is probably not 100% ethical and is being moved offshore and invested here in Australia and in fact all over the world. (London is a great example) This money flow and false demand serves to push prices up for your average Australian making it harder and harder for average Australians to be able to enter into the market. What in turn happens is that the government needs to pay out more First Home Owner Grants and support for these people. Not only that, APRA then make it harder for Australian’s to invest by changing lending practices. Increasing interest rates and lowering LVRs. These changes are only hurting Australians not foreign buyers. I think government need to take a longer term view. In most countries around the world, you are only allowed to have a long term lease as a foreign investor.
I believe that foreign investors should have a much higher stamp duty and it should be much easier for local people to invest and try and get ahead. The government should give local people a chance to become self-funded retires and that will cost the government less in the long run.