Property Rush, Locals Cannot Afford
The march of foreign cash has significantly affected the parameters and dynamics of property pricing and accessibility for many locals particularly in Western countries, Singapore and Hong Kong.
Not often mentioned in media discussion is what these markets and their governments are doing or not doing to resolve this situation.
Noveau rich or ambitious individuals with excess to plenty of cash would need to invest, spend or transform their cash holdings into other forms of assets. What their funds can buy with properties back in their country of origin may not compare with the quality of houses, farms and resorts they find in other nations with higher standards of governance, environment and health measures. So these people get into countries with open markets, economies, mindsets and sense of fair play.
What the Joes and Janes in countries receiving these outsiders may not fully appreciate is that foreigners may not have the same standards in political correctness, cultural norms and accepted commercial behaviour.
Foreigners may also have intimate and practical knowledge of how to overcome any regulatory or legislative roadblocks. This is either due to their hiring of local experts or their sheer passion to go around obstacles in the markets they target.
External factors causing unreasonable spikes in property prices, for example, are usually outside the effective management of individuals, local governments and parties in various stages of a transactional sale or purchase.
Media, political parties and action groups in the countries receiving such disruptive foreign transactions must increasingly look at themselves for workable solutions.
I have heard of foreign buyers of property, who are caught breaching important rules and restrictions, say they could not proceed with their illegal purchases without the cooperation of local lawyers, real estate agents and bankers whom they engaged to advise them.
State governments, local councils and Federal authorities also stand to gain huge revenue streams with higher property exchange prices and a higher turnover of sales and purchases.
Better recognition and acknowledgement of such vested interests by local parties in the sales of properties to foreigners must first be highlighted before anything else.
I do not see a rush by foreigners rushing to buy properties in countries with big pollution, corruption, employment, economic and political problems. Many countries in the world, unlike Canada, Australia and the UK, are not so friendly to non citizens or non residents being so blatantly allowed to buy properties, especially when the houses or apartments are left unoccupied.
Even more interesting is the fact that many non-Western nations significantly better value the strategic, security and political implications of parcelling out the leasing or ownership of public important assets, like ports, highways, air terminals, resource land and telecommunication networks.
Nations, which work hard to rely more on developing their own economic niches, resources and uniqueness, will prosper better than those which are just happy for foreigners to determine the fate and prospects of their economy. It is a crucial time that Western societies and economies do not take the easy way out for only short term gains.
Nations which do not seriously rethink and restrategise their socio-political, financial and economic models in the 21st century are doomed to a lower quality of life.
In the Australian capital cities, property speculators are encroaching dangerously to operate in lower income suburbs, as the ugly head of a low supply of residential houses, as opposed to units, has not been resolved.
Even if foreign buyers begin to face more taxes and tighter rules in the Australian market, these may prove to be ineffective to stop the bulldozer of easy money, willing local partners and street smart approaches by foreign buyers.