April 25, 2010

Wow. I haven’t being paying much attention to the Australian housing market, but it seems that while many parts of the world (mainly the US) struggle with an oversupply of housing, Australia is combating a serious shortage of 200,000 homes and skyrocketing housing prices.

One way to combat the shortage is tightening rules on foreign investment in real estate, and introducing penalties to enforce the changes, to ensure pressure isn’t placed on housing availability for local residents.
According to Business Week:
“We want to make sure that foreign speculators are not going to force up prices for Australians seeking to buy their own home, buy their first home, and we think this is the right course of action,” said Rudd, who faces an election within a year.
Australia will back up the changes with compliance, monitoring and enforcement measures including civil penalties, Assistant Treasurer Sherry said in a statement today. These include compulsory sales of property purchased in breach of the new investment regime, Sherry said.
Temporary residents will be required to start construction on undeveloped land within two years of purchase or be forced to sell, he said. The tighter rules will also apply to people on student visas, Sherry said.”
Australians may have not suffered through the impact of a bubble like the US did, but now are doing all they can to keep housing prices reasonable.

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