Chinese property buyers – FIRB under fire – Auctions boom – Melbourne units, no kitchen, no windows

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Auction market returns to form
God save the Queen … and the auction market from her birthday. Auction levels have returned to similar volumes after the holiday, with 2345 scheduled this week. Sydney has 744 auctions scheduled, compared to 577 last week. Melbourne has 922 compared to 335 last week, with another 900 next week. Brisbane has 117 auctions scheduled, Adelaide has 69, Canberra has 39 and Perth has 29. Volumes are about 9 per cent up year over year. Read the full story here.

Foreign investment law “a regulatory regime … that appears to have more holes than a Swiss cheese.”
FIRB chairman Brian Wilson gets called out for “smug indifference” about foreign investors flouting the law by one MP, but savvy foreign speculators, investors and agents have been four or five steps ahead of the FIRB response. Vendors of Australian property operating in China have increased fivefold with more than 100 agencies in mainland China. The public reaction has ranged from xenophobia to stark questions about the enforceability of the law. Read the full story here.

A developer’s plan for apartments without so much as a kitchen highlights housing issues in Melbourne
Amid reports that new apartments are windowless shoeboxes designed for rent-seeking investors and not actual human beings, the mayor of Melbourne has endorsed proposals for new controls on how units are approved and built. In one case, a developer had attempted to gain permission for apartments without kitchens. The problem shows the tension between finding a way to build affordable housing in an explosive real estate market with $500 weekly rents for a two-bedroom unit, and the need to set standards for acceptable development. Read the full story here.

Low interest rate environment forcing savers to delay retirement or spending
While low interest rates may be expanding the pool of investors in real estate, the effect has also weakened spending by older risk-averse savers. The problem is foreign money, according to an Australian Financial Review study. Cheap money from the euro zone, the Bank of Japan and the United States Federal Reserve creates downward pressure on Aussie saving rates and forces investors to look elsewhere (like real estate) to get worthwhile gains. Read the full story here.

With deregulated commissions, sellers look for ways to negotiate fees with agents
Though the timing might be questionable, given how hard it is to sell property in the winter, advice circulating today from buyer’s agent Josh Masters of Your Empire: play agents off against one another, but don’t expect agents to compete on fees if you want top dollar in the market. Higher value properties can often negotiate a lower percentage commission. And you often get what you pay for with the cheapest commission. Read the full story here.

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