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Strong DollarDEVELOPERS and real-estate agents are divided on whether foreign investors are responsible for driving up house prices. But the two groups agree on one thing: the strong dollar has scared them away.

”A $1 million property is now … around 20-25 per cent dearer in round figures than it was a year ago in Singapore dollars, Chinese renminbi, Euros and especially in US dollars,” said the president of the Real Estate Institute, David Airey.

”It’s a good thing because the local market was getting overrun with foreign buyers, and that was putting unnecessary upward price pressure on properties, noticeably in Melbourne and Sydney … That price pressure was forcing local buyers to pay more or not buy at all.”

But Caryn Kakas of the Property Council, which represents developers, strongly disagreed that foreign buyers had any real effect on the market.

The number of foreign buyers was ”statistically insignificant”, she said, even before foreign-investment rules were tightened again in April. With foreign buyers already limited to buying off-the-plan apartments or new land releases, the changes mean that temporary residents now have to seek government approval to buy here.

”One-off purchases of large-scale multimillion-dollar homes seem to capture the imagination … but it’s actually a very small percentage,” Ms Kakas said. There are no centralised statistics on foreign buyers of Australian residential property, she said, and the lack of hard data had enabled a ”scare campaign”.

The developer Meriton said the strong dollar had clearly dampened the enthusiasm of Chinese buyers.

”The impact on other international buyers is harder to gauge,” said the Meriton sales manager James Sialepis. But he said the new rules had already reduced the share of foreign buyers.

Australian expatriates who had sent US dollars back when the Australian dollar was much weaker were ”taking great opportunities in this depressed market”, said the president of the Real Estate Buyers’ Agents Association, Byron Rose.

Story by Kelsey Munro www.smh.com.au

Tags: developers, economy, finance, investment, marketing, overseas, property, real estate

View the original article here

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