Overseas buyers fees described as insufficient
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Overseas buyers fees described as insufficient
Posted on Friday, February 27 2015 at 4:36 PM
A Federal Government proposal to charge foreign buyers application fees each time they buy property in Australia is ‘tickling around the edges’ – and it won’t tackle the ‘seismic’ changes in Melbourne’s housing market according to one buyers’ agent.
Mal James, of James
Buyer Advocates in Melbourne, says 50 to 75 per cent of properties on the books
of some real estate agents are now being sold to overseas buyers. He says the
latest Government proposal won’t slow the influx of international buyers
snapping up properties in Melbourne.
“This has serious ramifications. In many cases,
we are seeing local buyers almost giving up because the market has changed so
dramatically,” James says.
“And it’s not just young homebuyers who are
missing out. Middle-aged buyers and middle class Australians are also being
priced out of the market. For people climbing the ladder, the only choice is to
be pushed further and further away from the city and into the outer suburbs.”
James says the government proposal to charge
foreign buyers a $5,000 application fee to buy property of less than $1
million, and $10,000 for every extra $1 million in the purchase price won’t
have any impact on wealthy overseas investors. The proposed fees apply whether
potential purchasers are successful or not.
“Do you really think a $10,000 or $20,000 fee is
going to bother a Chinese buyer of a $3 million or $4 million home?” he asks.
He cites the sale of a property in the Scotch
Hill precinct this week as a prime example of the pressures created by overseas
buyers. The five-bedroom home in Kembla Street sold before auction for $5.35
million. James says the seven bidders vying for the home were all of Asian
background.
He says this pressure cooker effect has also
been seen in Balwyn and North Balwyn, where some property prices are now on a
par with Bayside suburbs, such as Hampton. Ten years ago, he says, Bayside
prices were 50 per cent higher until the eastern suburbs began attracting
Chinese and Indian buyers.
Policy changes in 2008 made it easier for
overseas buyers to purchase property and were the start of the seismic shift, he
adds.
“We all loved it in 2008 … but now it’s
significantly changing the game.
“Is it healthy to have a lot of money coming
into a market segment that’s distorting values significantly? When the rules
changed in 2008 the dam was broken and it has never been patched up.
“There needs to be a fuller understanding of the
problem. At the moment many young people, many middle class Australians and
even upper class Australians, are being priced out of their own markets.
“If you’re an older
person downsizing now, you’ve hit Tattslotto. You’ll dismiss what I’m saying
because you’re getting a huge windfall.
“But people climbing
the property ladder are facing significant and very real problems.”
Read more on this GREAT DEBATE in the April
issue of API magazine, in shops from Monday.
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