The Australian property market is so volatile that people are putting off having children because they can't find a decent home.
In the very same suburban neighbourhoods, foreign investors are snapping up multiple properties and leaving them empty for substantial periods of time. However, while many have argued that this reason why young Australians can't get on the housing ladder is due to large amounts of foreign investment, this connection might not be grounded in economic fact.
Figures released this week show that 10% of all property in New South Wales is owned by foreign money. The research conducted by the Australian Financial Review show that this figure also includes native Australians who are married to those from overseas and those who now have permanent residence status in the country.
Peter Phibbs, the chairman of the University of Sydney's urban planning department, said that the two groups are also seeking different types of property. 'The Chinese investor is quite complicated and what they’re after is not the same as what your average first homebuyer is looking for.'
He went on to add that the Chinese tend to purchase property in small pockets of the big cities.
Mr Phibbs stated that it was important not to blame the Chinese in particular for the continually rising house prices. This connection is anecdotal rather than based on solid evidence. In fact, he argued that without this outside investment, the property market would be a lot smaller in Australia.
Since the financial crash, it is much more difficult to get finance for building property. When the Chinese invest upfront, this means big banks are more willing to lend to the construction companies as they already have some guaranteed capital. Australians can't offer this type of cash straight away.
