Concern is mounting that aggressive tax changes are driving foreign buyers from Australia’s property markets.
According to Australian Financial Review, new government taxes and credit restrictions on foreign investors are affecting demand to the point where major developers are withdrawing from the apartment market and some Chinese investors are struggling to settle on pre-sold apartments.
The falling interest from foreigners will no doubt put further downward pressure on house prices in Melbourne and Sydney.
Meriton’s Harry Triguboff wasn’t backward when coming forward yesterday when he spoke to the Australian Financial Review.
“It’s not bad, it’s very bad,” he said.
“When we start saying that stamp duty for foreign buyers should be 12 per cent instead of 4 per cent, that is called stupid.”
Mr Triguboff said foreign buyer demand had been softening for at least 12 months.
“Many of the Chinese can’t settle,” he said.
“So now we have to resell them – there is another problem.”
“And everyone thought that the Australian buyer would come in when the prices started coming down – they haven’t – I knew they wouldn’t – it wouldn’t make any sense if they did.”
The survey was taken by the ANZ and Property Council of Australia and found that residential Australian property sales to foreigners over the last three months have fallen in every Sttae except South Australia.
Melbourne’s Jonathan Hallinan, who founded BPM, is an example of a major developer pulling out of the apartment market.
“I am pulling out of the residential space,” he told Australian Financial Review.
“Since stamp duty changes have been implemented, foreign sales have been almost non-existent.”
Mr Hallinan said he expects apartment supply to grind to a sudden halt as a result.
Property Council of Australia’s chief executive Ken Morrison said he warned governments about implementing aggressive taxes for foreign buyers.
“If we continue to see government put up taxes on foreign purchasers then this trend will continue, and that’s a danger because foreign buyers have formed an important role to encourage housing construction activity in Australia,” he told Australian Financial Review.