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Foreign investors to blame for rising house prices?
Property Observer
The majority of respondents to a new survey believe foreign investors are the greatest factor pushing up house prices.
The survey of 1006 Australians conducted on behalf of non-bank lender State Custodians Home Loans, found 69% of those aged 50 plus believe so, 54% of Gen X, and 49% of Gen Y.
Some 60% of respondents in New South Wales considered foreign investment as the greatest factor in pushing up house prices, 63% in Victoria, 50% in WA, 54% in SA and 56% in Queensland.
Out of survey, 32% believe current low interest rates are merely encouraging more cashed up buyers into the market, driving up prices even further.
Joanna Pretty, general manager of State Custodians, said the collective impact of so many forces at work is what’s really contributing to the housing affordability crisis, rather than any one thing in particular.
“It’s the perfect storm of numerous factors coming together which is shaping the market we are experiencing today,” she said.
“The budget changes will go some way to help regarding foreign investment levels, but then the other factors still exist. There is still a lot of work to be done regarding affordability in general.”
“Other major concerns relate to population issues.
“Some 42% of people believe that over population in major cities is pushing up demand.
Another 28% also feel there’s not enough overall housing stock on offer for the amount of people looking, the survey found.
“It is definitely tough to buy in metro areas these days in the larger cities, especially if you’re struggling to make ends meet on your current wage,” said Pretty.
“There is currently a lot of competition with limited stock.
“Plus, the deposit requirements are significant, even if you’re an expert saver.
“Unfortunately buying your ‘forever home’ right off the bat is not always a feasible or quick option like it has been in the past.
“People who are competing for limited stock need to be open to suggestions on how to move forward.
“Look at different types of investing options. For example, if you don’t want to move from your neighbourhood, consider renting there and buy an investment property elsewhere. Make sure you’re constantly scouring real estate sites and be on good terms with local agents so they can alert you early on if something in your price range pops up.
“Also seek out advice from lending experts about areas you are interested in and how much you can borrow. Make sure your finances are sorted out prior to your search starting so you can truly understand your limit.”
Other factors Australians feel are increasing house prices are negative gearing incentives for property investors (41%), and high costs like stamp duty and capital gains tax putting homeowners off selling and buying, thereby limiting homes for sale (35%).
