Foreign buyers spark Aussie property boom
A rapid rise in foreign buyers in the nation has seen prices in Australia’s major cities rocket.
However a Financial Times report into the country’s property market says many first-time buyers are now being priced out. Those in the nation are also fearful of property bubbles cannot be controlled by regulators.
Sydney and other major cities such as Melbourne are now being compared to London, Singapore and Hong Kong as foreign investors move money into property.
Interest rates have been cut to 2% by the country’s central bank but analysts believe that this has increased the flood of foreign money.
“The RBA would find it hard to cut again if prices continue to surge,” Ivan Colhoun, economist at National Australia Bank told the newspaper.
Prices in Sydney have increased by around 14% in the last 12 months and property investors now account for half of all mortgages.
The proportion of homes sold to first-time buyers dropped to 13.7%. As recently as 2009 this figure stood at 30%.
Australia’s government also plans to introduce new rules which make it more difficult for foreign investors to purchase property.