I hope you’re sitting down to read this, because you’re in for a shocker.
Personally, reading this article in News.com.au I didn’t know whether to laugh or cry. If you were ever wondering what drives the property prices up, now you have the answer - it’s the wealthy migrants, from Britain, India and China.
Apparently those “monstrous” migrants, even though their number is in average 500,000 a year (peanuts, compared to the total annual number of property transactions), somehow manage to drive the property-price inflation. You’ve got to be kidding.
How on Earth can they be doing that, you ask? Well, the explanation John Edwards from Residex offers is that they earn above-average salaries, which they spend, buying houses for crazy prices. Yea, that makes a lot of sense.
Let’s see how much sense exactly it makes.
Imagine that you are a newcomer. You have just arrived in a new country that has a more expensive currency than my own, so the money you brought with you shrunk a fair bit. You haven’t had any predecessors here, who left you an inheritance, something to get your foot in the door of the property market - you are making a fresh start. Your salary may be above average, because you are a highly skilled professional - but locals are paid just as much, and the Immigration department makes sure you don’t get better employment terms than any Aussie born person with the same qualifications. You have the whole future of your kids to worry about, you have to pay their school tuition fees and put them through college. Why don’t you just go and buy a house that will cost you 5.5 times your household income, and top it up, throw another 10 grand in, so that nobody beats you on the price.
I rest my case.
If I had to name a suspect, I’d be having hard time to pick just one - but I can promise you, migrants wouldn’t be on that list. How about the taxation incentives that encourage investing in property, how about the banks that allow people to borrow amounts that are 500% of their annual income?
Reading the comments on that article, I could see that some people found this article to be racist to an extent. I, however, think that this article isn’t being fair to Australian-born people; it really presents them in a bad light. It basically says that Aussies are not skilled enough - and therefore not paid enough - to afford a house, if a small proportion of overseas immigration can price them out of the property market. If I was an Aussie by birth, I’d be offended.
I’d really like to get your opinion - what do you think, will property prices stop if no more overseas IT engineers, doctors or accountants will be allowed in Australia?
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“China Daily” writes: “Australia is now a hot real estate market for Chinese investors”. And one billion Chinese read it… but how many can afford? - Most of Australia’s immigrants are employed in health care, social assistance and construction. The real estate market is poised to grow thanks to record low interest rates and the Australian government’s stimulus package.
If you bring in more white collar workers the cost of living goes up and the wages remain stagnant. Im something like 8th generation in some branches - who knows but I have left the country or trying to leave (which is odd because as an Aussie its hard to migrate somewhere else). Everytime I come back to Australia as an Accountant the wages have hardly gone up - this is over 10 years. The poor migrants usually have some degree of extended family here or they are rich people from poor countries ( and those countries are getting richer - there are a hell of alot of people in places like Brazil that earn more than the average Aussie). If they are from Europe/UK they have a stronger currencly contrary to your claims that they have a less expensive currency. They also get an inheritance from the UK etc. Some migrants live in large family groups thus allowing economies of scale and they can get on the property ladder very quickly. Should the Aussie change his culture and live 3 families to a house? Well I think they will in the future and also there won’t be too many Aussies left. I won’t be in Australia if I can help it and before some smartarse says good riddance -think about what society is being built - people won’t have a stake in society they will feel poor and recognise that no matter how hard they study/work etc they will never have a house and society will become very divided which is the antithesis of how Australia was built.