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It’s time foreign investment, and its impact on housing affordability, is taken more seriously, a real estate CEO says.
Starr Partners chief executive Douglas Driscoll says the full impact of foreign investment hasn’t been felt yet, but it will be soon.
Mr Driscoll said we need to consider, and act on, the possibility of foreign investment wreaking havoc on the Australian economy.
“Foreign investment is not the elephant in the room, it is a herd of elephants in the room and more needs to be done. We need to start addressing the prevalence of empty homes and recognise its impact on the mounting affordability crisis,” he said.
Mr Driscoll believes foreign investors are acquiring property in desirable locations and leaving these properties empty. He estimates that more than 200,000 properties in Sydney sit empty.
“We know that the current affordability crisis is a matter of simple economics – demand heavily outweighs supply. Foreign investors are only exacerbating the problem by buying properties and leaving them vacant,” he said.
“In 2011, there were almost 120,000 unoccupied dwellings in Sydney alone. In the six years that have followed, foreign investment in property has risen exponentially and completely transformed the market.”
Mr Driscoll believes the boom in foreign investment is a contributor to this figure rising.
“From my own rudimentary research, I truly believe that the recent advent of foreign investment has contributed to this figure almost doubling. Foreign investment in our property sector only gained genuine momentum in 2012 and in just a few short years, we are already seeing 10-20 per cent of property being sold in some pockets to offshore buyers, which leaves a lot of Australians on the sidelines,” he said.
“In the first instance, at the very least, these properties should be offered for rent, but if they were to hit the open sales market, it would certainly help alleviate the sparsity issue we are currently facing.”
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