Chinese nationals 'illegally' buying luxury Australian real estate are forcing prices up by 30 per cent, leading agent claims
David Morrell says foreigners who do not meet residency requirements are illegally buying premium property in Australia's most expensive suburbs
He claims they are being aided by local real estate agents and lawyers
Chinese investors buying up property in Toorak, Hawthorn and Mosman
Foreign investors are illegally buying premium property in Australia's most expensive suburbs and are pricing locals out of the market, a leading buyers' agent has claimed.
David Morrell said foreigners who did not meet residency requirements were being aided by local real estate agents and lawyers to buy large amounts of property in well-heeled areas including Toorak and Hawthorn in Melbourne's inner-east and Mosman on Sydney's North Shore.
He also claimed the Financial Investment Review Board (FIRB) was doing nothing to stop them, and that real estate agents and lawyers were turning a blind eye because they were profiting from the sales.
Mr Morrell, director of buyers' agency Morrell & Koren, said the investors who were predominantly from mainland China were willing to pay well above market value just to secure property in wealthy suburbs.
In his submission to a parliamentary inquiry into foreign investment in residential real estate, Mr Morrell said he had witnessed a recent Toorak auction where the reserve was exceeded by 30 percent.
'There were three Chinese nationals competing, neither spoke English or understood the process and literally just kept their hands in the air,' he said.
Mr Morrell told Daily Mail Australia: 'It was great for the vendor they got a big free kick but it was surreal. It was like the auctioneer taking money off the tree it was just silly.
Chinese nationals 'illegally' buying luxury Australian real estate are forcing prices up by 30 per cent, leading agent claims
David Morrell says foreigners who do not meet residency requirements are illegally buying premium property in Australia's most expensive suburbs
He claims they are being aided by local real estate agents and lawyers
Chinese investors buying up property in Toorak, Hawthorn and Mosman
Foreign investors are illegally buying premium property in Australia's most expensive suburbs and are pricing locals out of the market, a leading buyers' agent has claimed.
David Morrell said foreigners who did not meet residency requirements were being aided by local real estate agents and lawyers to buy large amounts of property in well-heeled areas including Toorak and Hawthorn in Melbourne's inner-east and Mosman on Sydney's North Shore.
He also claimed the Financial Investment Review Board (FIRB) was doing nothing to stop them, and that real estate agents and lawyers were turning a blind eye because they were profiting from the sales.
Mr Morrell, director of buyers' agency Morrell & Koren, said the investors who were predominantly from mainland China were willing to pay well above market value just to secure property in wealthy suburbs.
In his submission to a parliamentary inquiry into foreign investment in residential real estate, Mr Morrell said he had witnessed a recent Toorak auction where the reserve was exceeded by 30 percent.
'There were three Chinese nationals competing, neither spoke English or understood the process and literally just kept their hands in the air,' he said.
Mr Morrell told Daily Mail Australia: 'It was great for the vendor they got a big free kick but it was surreal. It was like the auctioneer taking money off the tree it was just silly.
And lots of mid level suburbs, eg Melb, Box hill, Glen waverly, Bentleigh etc $400k suburbs now $1mill suburbs. Few locals buying in these areas anymore. Another government sanctioned scam.
David Morrell said foreigners who did not meet residency requirements were being aided by local real estate agents and lawyers to buy large amounts of property in well-heeled areas including Toorak and Hawthorn in Melbourne's inner-east and Mosman on Sydney's North Shore.
Why would foreigners act illegally and why would advisers encourage them to do so when all they have to do is make an application with the FIRB.
That's what poor old Gunna never understood.
Any expressed market opinion is my own and is not to be taken as financial advice
I don’t particularly care how many new apartments foreigners buy, as long as enough new stock is sequestered for local buyers. It used to be a maximum 50% of new units could be sold off shore. There are no limits now.
This is just plain wrong. Only the Harry Triguboffs of the world benefit by this. Madness.
As for existing housing stock, how on earth is it deemed “ok” for non-residents to splash millions on them, just because they can? As long as they have a relative studying here, it’s now all “ok”.
I (and many others) think the changes to the FIRB rules in 2010, suck big time. Foreign money is responsible for significant house price inflation in established suburbs and it’s contributing to pricing a generation of younger Australians out of the market.
Time to go back to the FIRB rules as they were pre 2010. In fact, get rid of the current department at FIRB in charge of policing residential property compliance and properly fund a new cop on the property block.
And lots of mid level suburbs, eg Melb, Box hill, Glen waverly, Bentleigh etc $400k suburbs now $1mill suburbs. Few locals buying in these areas anymore. Another government sanctioned scam.
Bentleigh originally flourished on a government scam, Sir Tomas Bent as a ten bob note nonetheless, you need to at long last get with the program.
I have been suggesting for a while that the mitigating factor in China’s urban land price bubble, is that at least the “value capture” has been made by government rather than the private sector, enabling taxes to be kept lower.
But this would not be the case if government has been giving the developers big fat refunds under the table.
There is no rational reason for this other than to conceal corruption. It would be perfectly logical to just have lower land sale prices in the first place, and hopefully have more affordable housing and a better-balanced local economy.
The question really now is, all the investors who have bought the finished “housing” at absurd prices, are “greater suckers” for what? Who has run off with the gouged profits? This changes a lot; no wonder the reformers at the top of the CCP are really going for people to make an example of over this. China’s whole economic magic is illusory, which would not have been the case had local government genuinely been capturing the full land sales price for spending on useful things like education. Now we can see that local government is actually in a massive fiscal crisis and has not been doing socially and economically useful spending to the potential extent at all.
I had given the CCP credit for trying a bold experiment, but it seems now that the whole thing has not been masterminded at all, but was merely human nature unleashed and going for broke – and YEARS passing before anyone blew the whistle on it.
But I wonder how many people, even in the west, will see true free markets and competition as the correct path? I have always said that China could have adopted Texas policies; what we are seeing now is the outcome of not doing so. Hugh is right – stooges from the Left will accuse people like us of being “ideological” – BAH. How about being “good students of the school of real life”?
I was far too generous in assuming a cleverly managed plan by the CCP. Hugh’s assumption all along, of plain old corruption, was correct.
We haven’t seen much evidence yet in contemporary western urban planning, of the same sort of thing, but the conditions for it would be hard to set up better than they have been.
There is nothing in the FIRB Policy that appears to be intended to inhibit foreigners buying ordinary homes, the FIRB are only interested in major assets in the national interest.
The Government welcomes foreign investment. It has helped build Australia’s economy and will continue to enhance the wellbeing of Australians by supporting economic growth and prosperity. Foreign investment brings many benefits. It supports existing jobs and creates new jobs, it encourages innovation, it introduces new technologies and skills, it brings access to overseas markets and it promotes competition amongst our industries. The Government reviews foreign investment proposals against the national interest case-by-case. We prefer this flexible approach to hard and fast rules. Rigid laws that prohibit a class of investments too often also stop valuable investments. The case-by-case approach maximises investment flows, while protecting Australia’s interests. Our Foreign Investment Review Board (FIRB) will work with an applicant to ensure the national interest is protected. But, if we ultimately determine that a proposal is contrary to the national interest, we will not approve it. The Government also recognises community concerns about foreign ownership of certain Australian assets. The review system allows the Government to consider these concerns when assessing Australia’s national interest.
Any expressed market opinion is my own and is not to be taken as financial advice
Why would foreigners act illegally and why would advisers encourage them to do so when all they have to do is make an application with the FIRB.
That's what poor old Gunna never understood.
First you told everyone that you couldn't get FIRB approval easily, Gunna and Chodley Wontok showed how easy it was
Then you said nobody could buy without FIRB approval and Gunna and virtually every other commentator since has shown that there is nowhere in the purchasing process where you would actually show any 'approval'
Then you said Austrac was ensured nobody moved money into Australia examined, Gunna said that was BS and the even Austrac have stated they don't look at real estate related funds.
Then the other week you were out there saying Australian banks wouldn't lend to foreign nationals without FIRB approval and Gunna posted a page and a half of links saying they would.
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