What is Australia’s policy on foreign investment? The federal government can’t seem to make up its mind.
Do we want to tap into the flood of global capital, particularly from Asia, or don’t we? There is a big gap between what the government is saying and what it is doing.
They are saying that Australia is open for business and welcomes investment in new housing construction, while at the same time slapping a new tax on foreign investment on the housing supply they want to encourage.
The only thing new taxes do is to discourage people from buying. The bulk of sales to foreign purchasers of newly constructed housing are well below a million dollars. For these purchasers the extra charges will bite.
The result? Less buyers, pre-sale hurdles missed, lower supply to the market, and upward pressure on prices.
The message seems to be that we welcome foreign investment, just not from foreigners.
As the intergenerational report will show this week, we need a lot of housing to support our growing population. And we need investment – including foreign investment – to make it happen.