Australian Government To Stop Property Price Rise

In Australia, business visa holders are often on the search to find some good properties to buy. As it is, the Australian real estate market is teaming with so many properties that could easily turn out to be something more than their current price. Thus, even foreigners are on the rush to get a piece of land here.

However, while this one might sound good and all, the government is now trying hard to regulate the entry of foreign buyers into the Australian real estate market. In fact, they have already passed a law pushing for stricter requirements on foreigners staying here and wanting to purchase land. The move has actually attracted the attention of not only foreign buyers but also of local ones.

But there is really a valid reason behind the move. According to some experts, it is actually the influx of foreign buyers that is causing the upsurge in prices. They explained that the prices were driven up due to the price speculation that these buyers often get into.

One example of this was the recent purchase of a 900-square meter apartment complex in Melbourne by a Chinese businessman. The buyer, through her holdings company, paid more than $19 million for the whole complex, which was a record high. The actual money was provided for by the Bank of China via a loan.

The sale didn't go unnoticed by the public, as they have pointed that it was this kind of purchases that are causing the real estate market to shoot up to astronomically high prices. Some experts have also shown that this kind of buying was what have actually caused the financial crisis that the country and the rest of the world experienced in 2009. They said that when the prices went up so high, the financial institutions were not able to follow suit, leading to the crash.

Experts argue that, since the Australian economy is still pretty much on a recovery stage, this one would surely have a grave effect. They warned that if left unchecked, the situation can potentially put the country back to crisis levels. Thus, they have urged that the government take action on this one.

The Australian government has responded to all these clamors by issuing a set of new rules for foreign property buyers. One of the restrictions that they are planning to set up is a cap on the number of purchases that a foreign individual can make. They are also considering putting strict regulations on the prices set by property agents.