Should ‘Punitive Measures’ On Foreign Investors Be Eased?


Following the downturn in building activity that started in March, the Housing Industry Association (HIA) said the nation’s housing sector has “already stepped back” in its role as a major driver of the Australian economy.

“Now is not the time for governments to hit the industry with punitive charges,” said Tim Reardon, the HIA’s principal economist. recession australia note money economy squeeze tighten save saving budget cut

“Government interventions into the market so far include: state governments imposing punitive stamp duty charges on foreign investors, federal charges for foreign investors, a new set of visa rules that could slow overseas migration, restricting lending to domestic investors and new regulations limiting interest-only lending,” he added.

Reardon also highlighted the Chinese government’s new exit clamps on yuan leaving the country, acknowledging it would have a significant impact on the Australian home building industry.

“Foreign investors have been attracted to the Australian housing market and they have been investing billions annually in the construction of new residential dwellings,” he said.

“These investors have contributed to activity and employment in metropolitan areas, building the supply of new housing stock and easing pressure on rental markets.”  

Last week, the State Council of the PRC issued the first set of rules that restrict Chinese investment into overseas property development.

These new restrictions are forecast to reduce the supply of new housing stock entering the market, and could push house prices further up in the east coast capitals.

In light of these developments, Reardon warns governments of all jurisdictions to proceed with caution when imposing new “punitive measures” on this segment of the market.

“Foreign capital is highly mobile and if it is forced from the market rapidly it could accelerate the downturn in the sector unnecessarily,” he said.

“There is a risk – if uncoordinated and poorly considered policies are introduced to curb foreign investment – that the decline in activity in the sector will be accelerated.”


Subscribe & don’t miss a single episode of Michael Yardney’s podcast

Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.

Need help listening to Michael Yardney’s podcast from your phone or tablet?

We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.


Prefer to subscribe via email?

Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.


Your Investment Property Magazine is the intelligent property owner’s choice when it comes to learning about Australia’s property market. Your Investment Property Magazine

'Should ‘Punitive Measures’ On Foreign Investors Be Eased?' have no comments

Be the first to comment this post!

Would you like to share your thoughts?

Your email address will not be published.


Copyright © Michael Yardney’s Property Investment Update Important Information
Content Marketing by GridConcepts