In the quest to make the Australian dream of homeownership a reality for more citizens, the Albanese government recently announced a bold move to clamp down on foreign investment in the housing market. However, this initiative has been met with scepticism and outright criticism by one of the nation’s most prominent financial experts.
The measure, which has been touted as a way to ‘ease pressure on our housing market,’ has been labelled by this expert as nothing more than ‘b*******’. Here’s why.
Mark Bouris of Wizard Home Loans and Yellow Brick Road, is no stranger to the intricacies of Australia’s housing market. His recent comments on his Property Insights Podcast have sparked a conversation about the effectiveness of government interventions in the housing sector.
The legislation in question, set to take effect on 1 April, prohibits foreign investors from purchasing established homes for at least two years and aims to crack down on foreign land banking. Housing Minister Clare O’Neil and Treasurer Jim Chalmers have positioned this as a comprehensive strategy to tackle the housing affordability crisis, stating, ‘We’re coming at this housing challenge from every responsible angle.’
Despite the government’s confidence, Bouris remains unconvinced. He argues that foreign buyers are not the primary drivers of the current market conditions and that their influence is often overstated.
He points out that the segment of the market affected by the new legislation—established homes—is not where the majority of foreign investment occurs. Instead, foreign buyers tend to target the luxury end of the market, which is out of reach for the average Australian family.
‘I don’t think it’s going to make a huge difference. So it’s all b*******. It’s window dressing,’ he remarked.
His scepticism is echoed by Nicole Leggat, principal of NL Legal, who appeared as a guest on his podcast. Both experts agree that the restriction on existing homes is unlikely to make a significant dent in the market.
With an average of 520,000 home sales each year in the country, the government’s move is expected to influence only around 1,600 of those transactions, equating to a mere 0.3 per cent impact on annual sales.
This revelation raises important questions for Australians over 50, many of whom are considering downsizing, investing in property, or helping their children enter the housing market. As you navigate the complexities of the housing market, it’s essential to stay informed and critically evaluate the potential impact of new policies and understand the factors influencing housing affordability.
We invite you to share your thoughts and experiences regarding this topic. Have you felt the impact of foreign investment in your local housing market? Do you believe the government’s new legislation will make a difference in housing affordability? Join the conversation in the comments below.
Also read: Housing market sees major shift with foreign buyer ban: What it means for you
Foreigners should not be allowed to own property at all. That is the case in many other countries where only citizens can own real estate.
But the biggest reason for high housing prices, immigration and tax concessions for investors are outside the changes the ALP or LNP are prepared to make.
Australia is one of only 24 Countries Worldwide to allow Foreign ownership of Property, and some of these Countries have caveats on that ownership. EG:- Primary Residence, IE: you have to live there.