Foreign investors push house prices up

25/02/2010

The federal government relaxed its foreign investment rules for residential property early last year. Real estate agents are reporting strong demand from offshore investors.

Some agents are reported to be setting up offices in China and arranging "property tourism" to tap the demand for Australian investment properties. Local buyers are said to be missing out on houses due to higher bids from overseas investors.

"We have lost three properties (that we know of) to overseas investors who pushed the prices well above the limits of the Australian residents in the room," said Nikki Symonds, from Sydney's Lane Cove.

"Three overseas online bidders pushed the price up from $880,000 to $950,000."

Professor Steve Keen from the University of Western Sydney has criticised the government's decision to open the door for more foreign investment in local real estate.

"If houses aren't for the people in their own country, then who the hell are they for?" Dr Keen asked.

"And if you let incomes in other countries determine your prices, all you're doing is importing a bubble," he said.

Source: Sydney Morning Herald