Knight Frank predicts fall in foreign investment
A new report from Knight Frank suggests that the level of foreign investment in Australian property will fall if the government decides to toughen restrictions next month. In its Australian Apartments Residential Market Overview for Quarter 3 the realtor says prices in Sydney and Melbourne in particular are being kept high by foreign buyers but new regulations may cool demand. Despite concerns that foreign investment is pricing out Australian first-time buyers; with 1 in 6 buyers said to be from overseas; with an increase in supply in the next year a sudden reduction in foreign investment could cause some problems.
Foreign investors are not the problem; it’s affordability
The CEO of Mortgage Choice has also been warning against the curbing of foreign buyers, telling the firm’s AGM that the government should be looking at other ways to tackle affordability. Michael Russell said the real danger would not be in Sydney or Melbourne but in the rest of Australia where the market is not so hot. He says that lending restrictions are not overly loose and arrears are low and claims a lot of the RBA’s concerns are unfounded. Interest rates are likely to remain low well into 2015 fuelling a demand for home loans.
Price guide ban is causing frustration
The ban on price guides for auction properties in Queensland has not found too many fans. Agents and buyers are frustrated at having to use guesswork in many cases when buying at auction; the state government banned price guides to prevent underquoting and could issue $60,000 fines on agents who continue to use them. Some real estate agents report that there is lower interest in auction properties now than before the new law came in. They are allowed to issue written price guides but only if the vendor agrees. Some buying agents though prefer the new rules but would like reserve prices to be published in advance so that potential purchasers don’t waste money on surveys and other fees on a property that is out of their budget.