Many Aussies Face a Lifetime of Renting Due to High Cost of Houses, While Chinese Snap Up $24B Worth of Properties in the Last 7 Years (VIDEOS)
By Vittorio Hernandez | March 6, 2014 10:10 AM EST
UK house prices are soaring amid the Help to Buy and Funding for Lending schemes (Reuters)
Some Australians could no longer afford the soaring cost of homes in their countries that they could end up as lifetime tenants. And they could partly blame the rich Chinese property investors who snapped up $24 billion worth of real estate Down Under the past seven years.
The study by Credit Suisse released on Wednesday, which used data from the Australian Bureau of Statistics and the Foreign Investment Review Board, estimated that about 20 per cent of new properties in Sydney were purchased by rich Chinese investors.
In the next seven years, the amount of money these taipans will bring would go up to $39 billion by 2020, worsening the situation for homeless locals.
"While Australia has some of the most affordable housing in the world, further strong Chinese demand can push prices even higher," the report warned.
With home prices in key Australian cities like Sydney and Melbourne going up by more than 30 per cent since 2008, Australia has become one of the most expensive real estate markets in the world.
But Deutsche Bank economist Phil Odonaghoe said the increase in domestic house prices is only marginally impacted by Chinese investors. It is more a result of low interest rates, increased affordability and domestic investors.
"The point that gets lost in this debate very often is that nobody focuses on the rules, which a pretty clear for a foreign investor. The principle that guides the FIRB policy is that foreign investment should increase the housing stock," he told The Sydney Morning Herald.
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