Sky-high property prices in certain Australian states have Australians concerned about affordability of housing in their country. To appease voters, New South Wales, arguably one of Australia’s most populous state, has doubled property taxes for foreign buyers of local property, targeting in particular Chinese investors who have been finding ways to circumvent previous regulations.
Housing debt has been growing as many locals blamed speculators for pushing prices to unsustainable levels. The country’s policymakers are highly aware of the risks of a property bubble bursting should prices continue to skyrocket. The Reserve Bank of Australia has already served warnings of rising levels of housing debts.
Starting July 2017, property taxes for foreign buyer of New South Wales properties will rise from 4 to 8 per cent. This follows in the footsteps of Victoria which already make the change last year. Land taxes for foreigners will also be raised. Country-wide regulations will also mean foreigners who leave their properties vacant for more than 6 months in a year will face fines while other property cooling curbs restricts foreigners from buying specific types of properties.
Home prices in Sydney and Melbourne have already fallen last month, but this respite is slight as the previous 12 months leading up to April this year has shown steady growth, a total of 15 per cent to be exact. With these new measures in place, the Australian government is hoping it eases the struggle first-time home buyers have been bearing.