Preface
The federal government has not seriously considered the opportunities for Australian housing affordability before. The Standing Committee on Economics of the House of Representatives recently released a report on individual foreign investment in residential real estate. The report has mixed reactions. It is almost certain that the media debate about Chinese real estate investment and housing affordability in major Australian cities provided the basis for the survey. Therefore, it is surprising that the scope of the investigation has almost no scope to investigate the relationship between foreign investment, housing prices and affordable housing solutions.
Reverse the history of Asia’s investment in Australian real estate. In the past three decades, media narratives of Asian property invasions and the geopolitical positioning of the federal government have formed an interesting cycle. This history tells us a lot about lost opportunities.
The story of an Asian buyer
In the United States, the United Kingdom, Canada and Australia, individual foreign investment in residential real estate is a long-standing political issue. In the past five years, the changing nationality of foreign investors in these countries has attracted widespread political and media attention. Since the 1980s, no media has focused on the foreign investment practices of Asian investors. In 1983, the “Sydney Morning Herald” reported that “our Asianization process is accelerating.” In 1987, the “Communiqué” reported “The New Asian Invasion: How to Sell Australian Property”.
Joseph Hajdu’s analysis of the media in the 1980s showed that “people believe that the flow of funds in Japan is…the main cause of real estate inflation” and has led to “increasing financial difficulties facing first-time home buyers”.
Recently, an audience member of the ABC TV program Q&A asked: “Why are Chinese people allowed to buy Australian properties? This is driving up prices and imposing a whole generation of rents.” Recent inquiries provide hope for a more balanced assessment . However, similar to the 1980s and 1990s, broader geopolitical forces are at work.
Australia’s geopolitics
Joseph Hajdu argued that “the rise in anti-Asian sentiment was the last thing the federal government wanted in the late 1980s, when the federal government was “trying to convince the public that Australia’s future is with Asia.” Australia was in the 1980s and 1990s. There is a surprising similarity between the focus on Asia and the status of the recent federal government. The Hora government revisited the geopolitical rhetoric of the Hawke government on Asia in the 1980s in the “Asia Century” white paper in the 1980s.
In both periods, government speech was flooded with pro-Asian political atmosphere and regional commitments. In the mid-1980s, the federal government recognized Australia as part of Asia. In cooperation with Japan, the government established the first Asia-Pacific Economic Cooperation (APEC) meeting in Canberra. Now, the Abbott government is advancing the China-Australia Free Trade Agreement. Like the Gillard and Hawke governments, the Abbott government is also trying to attract Asian capital. Therefore, it is not surprising that Asian real estate investment has recently shown corresponding growth.
How to seize affordable housing opportunities
This survey has the opportunity to turn the initial response to Chinese investment into a constructive discussion. It is recommended that the conclusion of foreign housing real estate investment rules should be retained. It indirectly accuses real estate agents, financial advisors and legal professionals of assisting foreign investors in violating regulations.
Foreign nationals invest in Australia because our political, financial and housing systems promote the development of their capital. Given that foreign investment will continue to exist, governments need to consider how to use foreign capital to achieve better social outcomes. It is not clear whether foreign investor capital will continue to grow. If possible, there are innovative ways to use the funds to increase the supply of affordable housing. This may include the use of these funds in areas where housing is most needed, as well as the interests of low-income families who are most disadvantaged by rising housing prices.
The survey found that foreign investors may not be part of Australia’s housing affordability issues. However, it did not investigate whether foreign capital, tax settings, and fair housing policies can be combined to give better results to those who are turned away by the increasingly expensive real estate market.
