Real estate, like almost every commodity or asset, is now part of a global marketplace. You only have to attend a few auctions or sales to realise just what a diverse group of buyers we have bidding on Australian homes.
But it is Asian-based buyers that have been catching everyone’s attention — including many economic and housing commentators — as their appetite for Australian property continues to strengthen, particularly Chinese investors.
And is it any wonder?
Australia has a lot to offer including a stable and democratic political system, strong laws, a clean environment, internationally recognised education and, of course, a great lifestyle and many housing options to match.
However, I can’t help but think that this offshore demand may not actually be doing our markets any good.
Sure, more buyers mean more demand which helps produce higher capital gains. However, most foreign buyers are limited to newly constructed property, such as high rise apartments or house and land packages and subdivisions. Would these developments be in demand if they didn’t have so many foreign buyers propping up pre-sales? I think not. Especially as the type of housing is not in line with the traditional Australian life-style — one of the main reasons for buying here in the first place.
The resale and secondary demand for these properties, from future owners, investors and tenants, would have to be in question.
Until next week,