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USA halts immigration visa program, which means more foreign buyers for Australian property; The hold on US visa approvals visa follows unprecedented demand from Chinese nationals
Topic Started: 11 Sep 2014, 02:43 PM (823 Views)
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More Chinese buyers to target Australia

September 11, 2014 - 11:49AM
Lucy Macken

Chinese buyer demand for Australian property is set to rise even further now the United States has halted an immigration visa program until October 2015.

The hold on US approvals for the popular EB-5 visa follows an unprecedented demand from predominantly Chinese nationals, maxing out the 10,667 allowable visas for this financial year.

Australia is the second-most popular country searched by house hunters in China after the US, followed by Canada, new data from China's international property search portal Juwai shows.

As a result Australia can expect more Chinese people to apply for our own Significant Investment Visa, which will mean more demand for our real estate, according to Juwai co-chief executive Andrew Taylor.

And the windfall is most likely to be felt at the prestige end of the market.

As Australia ramps up the number of approvals for our Significant Investment Visa, the NSW state government is vying for a greater share of the investment dollar from complying investments.

As of September 1, migrants were able to invest in the complying investment of their choice rather than tying at least 30 per cent of their investment to NSW Waratah Bonds.

"This change will further consolidate NSW's globally competitive position as a preferred investment destination for investor migrants," Deputy Premier Andrew Stoner said in announcing the change.

10 most popular countries for Chinese house hunters*

United States
Australia
Canada
United Kingdom
New Zealand
Thailand
Singapore
Portugal
Spain
Malaysia

Read more: http://smh.domain.com.au/real-estate-news/more-chinese-buyers-to-target-australia-20140910-10dsf0.html
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Zorba
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A very interesting anecdote from a Chinese colleague of mine. He is a property speculator like the best of the rest, and his take on the housing market is...

It is going to drop!

Here were his reasons

Due to the housing market crashing in China, the smart money that was going into the Australian housing market is now heading for the stock market, which has, after being stable for a number of years risen by 10% recently.

It is much easier / less risky with the clamping down on money leaving China to invest in the stock market and as everyone piles in you can make a far bigger return than in Oz RE.

Note that I use the term invest, his words were actually Chinese like to gamble and will have a punt on anything, that anything was Oz RE, but is not anymore.

Sure this will not crash the market overnight but it will remove the new joiners to the Ponzi.
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We don't need stronger foreign buyer regulation, we need more stringent enforcement: REIA

Jennifer Duke | 12 September 2014

Foreign ownership rules do not need strengthening but rather existing laws need to be properly enforced, according to the Real Estate Institute of Australia.

The organisation notes that an $85,000 fine already exists for breaching current regulations.

In the latest release of REIA News, Issue 38, chief executive officer Amanda Lynch notes that the fine has not been invoked, as the Foreign Investment Review Board has “apparently not prosecuted a single foreign buyer for breaching foreign ownership rules”.

Lynch points to e-Conveyancing as a method which would assist in more stringent enforcement of existing regulations.

This suggestion was recently put to the House of Representatives Standing Committee on Economics for the Inquiry into Foreign investment in Australian real estate by First National’s Ray Ellis, who is also an REIA board member.

Looking at the 2012-2013 Foreign Investment Review Board Annual Report, Lynch notes that 11.4% of foreign investment in real estate by value comes from China, while 9.5% comes from the USA and 9.5% comes from Canada.

“This is a particularly interest fact to note as media articles on foreign investment are frequently dominated by stories highlighting only one particular source country, China,” she says.

Property Observer has been vocal about the importance of discussing foreign investment without a xenophobic overtone, as well as the difficulties facing journalists reporting on the topic.

Lynch says that the REIA supports foreign investment due to its assistance with increasing supply.

The report shows that 2012-13 was the first year since 2009-2010 that the purchase number of sub-total of 5,101 ‘developed’ stock, or existing homes, exceeded the sub-total of 4,549 ‘new dwellings’.

The report paints an interesting picture of the growth of the developed stock sector.

It states that the purchase of developed stock is “primarily [by] temporary residents in Australia acquiring one existing residential property for use as their residence in Australia”. A footnote suggests it includes a small number of approvals relating to foreign companies acquiring residential property for company employees to reside in.

The sudden increases between the 2009-10 and 2010-11 reporting periods can be explained by a shift in government regulations during that period.

On 24 April 2010 temporary residents were no longer exempt from notifying the government of proposed acquisitions of established residential real estate for their own residence, nor new property or vacant land. This exemption was brought in for just one year, from 1 April 2009, where it was noted that temporary residents, in previous years, was said to have accounted for around two-thirds of real estate applications.

Read more: http://www.propertyobserver.com.au/forward-planning/investment-strategy/property-news-and-insights/35587-foreign-regulations-do-not-need-strengthening-reia.html
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