I saw this originally on Price Tags. It’s a very interesting news doc to watch. The focus is primarily focused on the US and Australia. However, those of us in Vancouver are keenly aware that the same phenomenon is having an effect on our own local housing market.
For better or worse, these Mainland Chinese buyers are investing all around the world. In the short term, it’s having a negative effect on a local’s ability to buy a home in their own city. In the long term, we will see how things shake out.
The call for some sort of foreign ownership or absentee ownership fee should be seriously considered. Even such measures in Australia have slightly dampened the hot Sydney real estate market. Read this from the Sydney Morning Herald.
The federal government plans to charge fees to foreign nationals buying residential property and fine those who break foreign investment laws, in an attempt to improve housing affordability amid some of the world’s highest property prices.
The scheme could raise about $200 million a year by charging foreign home-buyers $5,000 for properties valued under $1 million and an additional $10,000 for every additional $1 million, Treasurer Joe Hockey said on Wednesday.
Mr Hockey said a register of foreign nationals buying real estate would be established and those who break the law would face a fine up to a quarter of the value of the property and could be forced to sell.
I think such fees are probably a good idea. Will it deter foreign investment? I doubt it. I think those with the money to buy will barely blink an eye at an extra $5-10k. Chump change in many cases, I’m sure. However, I think we need to slow the market just a little and at least get some financial benefit for our own governments out of it all. There’s my 2 cents (or chump change).