Liberal Party Defence and National Security Policy Chair, Lincoln Parker, claims that Chinese buyers are spending “to the tune of $3.4 billion a year, which equates to about $65 million per week every week, which is driving the prices up for the average person”.
Parker added that “in Sydney, we know that you’ve got to be earning about $300,000 to afford a home”.
He also said the “Australian government ought to be looking after our people first as opposed to getting rich off Chinese investors that are either laundering their money”.
“Or, the other thing we heard from real estate agents is that they’re using these as investments and they’re not even renting them out”.
“So, it’s driving prices up and the average Aussie can’t afford a house and they’re sitting there empty. It’s awful”, Parker said.
The data is certainly worrying.
Since Australia’s borders were reopened in late 2021, the share of Australian homes sold to foreign purchasers has risen significantly, according to NAB survey data:
Offshore searches on realestate.com.au also shows that foreign buyer interest in Australian property has hit record highs, led by China:
The Australian Treasury disclosed last month that approvals for foreign acquisitions of Australian residential properties lifted 40% in the fourth quarter compared to the same period last year, again led by China.
Meanwhile, property portal Juwai IQI shows Australian residential real estate is the number one destination for Chinese purchasers.
In the third quarter of 2023, inquiries from Chinese buyers via Juwai surged 158%, which was the second straight quarter of double-digit growth.
David Morrell, director of Morrell and Koren, described the situation as “nuts” in an interview last month with news.com.au.
“We are seeing jumps of $2-3 million dollars on properties”, he said.
“We have a market place that is disproportionately being sold to Chinese buyers, relative to the rest of the population”.
The Visual Capitalist projected that Australia would experience the most significant inflow of wealthy migrants (+5,200) in 2023, whereas China would see the largest outflow of said wealthy migrants (-13,500):
A significant share of these migrant millionaires will obviously arrive in Australia and purchase our homes.
Meanwhile, Australia has the weakest anti-money laundering laws in the developed world pertaining to residential real estate, which has made Australia a magnet for dirty foreign money, especially from China.
Over the past 20 years, billions of dollars are estimated to have been laundered through Australian homes, predominantly from China.
Unless anti-money laundering rules are tightened and enforced and we ban purchases of existing homes from non-permanent residents, Australia’s housing market will continue to attract and conceal illicit funds from offshore, and foreign buyers will continue to outbid Australians for homes.
