Apparently, the Chinese real estate market is in a tailspin and they are desperately seeking alternatives. The press speaks of “frantic Asian buying.” It’s likely that most real estate sold offshore went to China last year.
In 2012-13, the Chinese topped the list for Australian real estate investment, according to the Foreign Investment Review Board. The board approved applications for purchases by Chinese worth more than $5.9 billion.
Chinese real estate investment leads to articles like this (fairly reasonable) and spawns comments like this (not so reasonable):
“Why bother invading a country when you can buy it a bit at a time.It’s fucking outrageous that foreigners are allowed to own residential property in Australia.
To the Chinese it’s a safe haven for their money invested where the Chinese government can’t get it’s hands on it, for Australians it’s having the opportunity of owning your own place evaporate. What’s the point if at the end of the day all that’s left is to pay rent so you can buy a house for some foreign investor.” (source)
But are the Chinese really taking over? Let’s look at the history for a moment.
The point of this chart is to emphasise that China is not buying a crazy amount of Australian real estate, in historical terms, and that it is hardly new for foreign citizens to buy our dirt.
Let’s ignore for a moment that not all FIRB applications turn into purchases and put in context the value of real estate applications FIRB approves for sale to foreigners.
But those 1 per cents could add up, you might imagine,and before long it’s Beijing from Bondi to Burke! Actually, no. Growth in value of the housing stock (appreciation + new homes) easily outstrips sales offshore.
All the effort and graphs in this post is really to address the madmen and worry-worts on their own terms. As if they would read it and change their minds because what they are worrying about is not even happening!
But even if the foreign owners increased their share of ownership of our real estate, I think it would make little difference to our daily lives. Who cares whether you pay your rent to an account at Westpac or Bank of China?
And if there is a military advantage to owning a few homes, I’m yet to puzzle it out. It seems more likely to act as a brake on aggression if China is well and truly intertwined with Australia.